The Employees Old-Age Benefits Act, 1976













Short title, extent, commencement and application.










Compulsory Insurance.






Nomination of body corporate pending establishment of institution.






Board of Trustees.



Power and functions of the Board of Trustees.



Appointment, Powers and functions of Chairman.







Rate and assessment.



Record and returns by employers.



Registration of establishments, etc.



Officials of Institution to check employer's books.



Increase of unpaid contribution and recovery of contribution, etc. as arrears of land revenue.



Safeguard of Insured person's right in default of payment of contribution by employer.



Refund of contributions paid erroneously.



Extinguishment of claims to contributions.







Employees Old-Age Benefit fund.



Investments and loans.



Budget, accounts and audit.



Annual Report.



Valuation of assets and liabilities.







Old-Age [Pension ].



Old-Age grant.



Widows pension.



Invalidity allowance







Calculation of qualifying contribution periods.



Benefit claims and payment.



Extinguishment of benefits.



Suspension of old-age pension and widow's pension.



Non-duplication of benefit.



Benefit not attachable, chargeable or assignable.



Repayment of benefit improperly received.



Institutions right to be indemnified in certain cases.



Recovery of amount due.







Decision of complaints, questions and disputes.



Review of decisions.



Appeal to Board.



Assessment of invalidity.













Contributions, etc.



Exemption from stamp duty.



Exemption from taxes.



Member and servants of the institution to be public servants.



Delegation of Powers.



Powers to make rules.



Power to make regulations.



Power to exempt.



Act not to apply certain persons.












(XIV OF 1976) 

15th April, 1976


An Act to repeal and re-enact the

law relating to old age benefits for the persons employed in industrial, commercial and other organizations


Preamble: Whereas it is expedient to repeal and re-enact the law relating to old-age benefits for the person employed in industrial, commercial and other organizations and matters connected herewith;

It is hereby enacted as follows: –




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 Pakistan.

(3) It shall come into force at once.

(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

(ii) which the Federal Government may, by notification in the official Gazette, specify in this behalf.

2. Definitions : In this Act, unless the context otherwise requires,-

(a) 'benefits' means old-age pension, invalidity pension, widow's pension, 'old-age grant and such other payments as may be determined by the Federal Government from time to time ;

(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 in respect of an insured person under the provisions of the Act ;

[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 ;


(c) 'employer' in relation to an industry or establishment, means any person who employs, either directly or through any other person, 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

(iii) a person responsible to the owner for supervision and control of an employee or for payment of his wages ;


(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;


[(e) 'establishment' means-


(i) an establishment to which the West Pakistan Shops and Establishments Ordinance, 1969 (West Pakistan Ordinance No. VIII of 1969), for the time being applies, and, notwithstanding anything contained in Section 5 thereof, includes clubs, hostel, organizations and messes not maintained for profit or gain and establishments, 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 of 1961) ; 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 17 ;


(g) 'industry' means any business, trades, undertaking, manufacture or calling of employees and includes any calling, service, employment. handicraft, industrial occupation or avocation of workmen ;


(h) 'institution' meant the Employees' Old-Age Benefit institution established or nominated under Section 4 [or Section 5] ;


(i) 'insured person' means a person 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 contribution are payable under this Act ;


(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 be unable to earn from his usual or other occupation more than one-third of the normal rates of earning in his usual occupation ;


(l) '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;

[(p) 'wages' means remuneration for services paid or payable in cash or in kind to an insured person, not being less than the remuneration based on the minimum rates of wages declared under the minimum Wages Ordinance, 1961 (XXXIX of 1961), without taking account of deductions for any purpose, under a contract of service or apprenticeship, express or implied, and shall be deemed to include any dearness allowance or other addition in respect of the cost of living, and any payment by the employer to an insured person in respect of any period of authorised leave, illegal lock-out or legal strike ; but does not include-

(i) any payment for overtime ; or

(ii) any sum paid to the employee to defray special expenses entailed by the nature of his employment ; or

(iii) any gratuity payable on discharge ; or

(iv) any sum paid a' bonus ;

(q) 'year', with respect to insurable employment means a total of three hundred and sixty-five days for which contributions are payable, or, in the case of insured persons who are not paid for weekly holidays, a minimum of three hundred and twelve days.






3. Compulsory Insurance: All persons employed in an industry or establishment under a contract of service or apprenticeship, whether written or oral, express or implied, shall be insured in the manner provided 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 as 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 this Act, to acquire, hold and dispute of property, both moveable 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 [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 may, from time to time, determine.


6. Management: (1) The general direction and superintendence of the affairs of the Institutions shall vest in Board, which may, with the assistance of the [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 institutions 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-

(a) the Secretary or Additional Secretary in the Labour Division, who shall also be the Chairman of the Board of Trustees ;

{b) four persons to represent the Federal Government, one each from the Ministries of Finance, Commerce, Industries and Labour ;

(c) four persons to represent the Provincial Governments, one to be nominated by each of the Provincial Governments ;

(d) four persons to represent employers ;

(e) four persons to represent insured persons ; and

(f) two persons to represent the Institution.

(2) Members to be appointed under clauses (d) and (e) of sub-section (1) shall respectively be chosen from a list of names submitted in the prescribed manner by the organizations of 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 provision of this Act; and

(b) to call for any information or direct any research to be made for the furtherance of the objects of the Act.

8-A. Appointment, power, and functions of Chairman: (1) The Chairman of the Institution shall be appointed by the Federal Government for such terms and on such terms and conditions as it may determine.

(2) The Chairman of the Institution shall exercise such powers and perform such function as may be prescribed,





9. Rate and assessment: (1) On and from the first day of July 1976, contributions shall be payable every month by the employer to the Institution in respect of every person in his insurable employment, at the rate of five percent of his wages in the prescribed manner:

Provided that no contribution shall be so payable on such of an insured person's wages as is in excess of [one thousand five hundred] rupees:

Provided further that contributions in respect of an insured person who continues in insurable employment shall cease on his attaining the age of sixty years, or fifty-five years in the case of a woman.

(2) Where an insured person does not receive any wages from the employer for any period, the Institution shall, subject to regulations, determine the amount of wages with reference to which the contributions shall be computed.

(3) Notwithstanding any agreement to the contrary, the employer shall not deduct from the wages of an insured person or otherwise recover from him any portion of contribution,

(4) Where the mode of payment of remuneration, whether in cash or in kind, makes it difficult to determine the amount of wages for computing the contribution, the Institution may, subject to regulation, determine such wages.

10. Record and returns by employers: Every employer shall keep such records and shall submit to the Institution such returns, at such times in such form and containing such particulars relating to persons employed by him, as may be provided in regulations.

11. Registration of establishments, etc.: (1) Every employer shall, before the expiration of thirty days from the day on which this Act becomes applicable to the industry or establishment in respect of which he is the employer, communicate to the Institution the name and other prescribed particulars of the industry or establishment and of every insured person employed in the industry or establishment.

(3) Every insured person may also communicate his name and other prescribed particulars to the Institution.

(4) On receipt of a communication under sub-section (1) or subsection (2), the Institution shall register the name of the industry or establishment or the insured person in such manner, and issue to the insured person a registration card in such form, as may be prescribed.

12. Officials of Institution to check employer's books: (1) Any official of the Institution, duly authorised by a certificate in a form specified in the regulations, may, for the purpose of inquiring into the correctness of any of the particulars stated in the records or returns referred to in .Section 10 or for the purpose of ascertaining whether any of the provisions of this Act have been complied with-

(a) require an employer to furnish to him such information as he may consider necessary; or


(b) at any reasonable time, enter any establishment or other premises occupied by such employer and require any person found incharge thereof to produce and allow him to examine such account books and other documents relating to the employment of persons and payment of wages, or to furnish to him such information, as he may consider necessary ; or

(c) examine, with respect to any matter relevant to the purposes aforesaid, the employer, his agent or any person found in such establishment or other premises or any other person whom the said official has reasonable cause to believe to be or to have been an insured person.

(2) The official referred to in sub-section (1) shall be bound to secrecy as regards all matters with which he becomes acquainted in the performance of his duties and which do not relate to matters provided for in this Act.

(3) If an employer fails to maintain records or to submit returns as required by the regulations, or otherwise fails to comply with the provisions of sub-section (1) and thereby makes it difficult to ascertain the identity of persons required to be insured or the amount of contribution payable the contribution shall be assessed on the basis of such evidence as the institution may find satisfactory for this purpose.

13. Increase of unpaid contribution and recovery of contribution, etc., as arrears of land revenue: (1) If any employer fails to pay, on the due date, the contribution payable by him under sub-section (1) of Section 9, the amount so payable by him shall be increased by such percentage or amount as may be prescribed:

Provided that in no case shall such increase exceed fifty percent, of the amount due.

(2) Without prejudice to any other remedy, the amount of the contribution due, together with the increase provided for under sub-section (1), may by recovered as an arrear of land revenue.

14. Safeguard of insured person's right in default of payment of contributions by employer: Notwithstanding anything contained in this Act, if an insured person has communicated his name and other prescribed particulars to the Institution under sub-section (2) of Sec. 11 and has been issued by the Institution a registration card under sub-section (3) thereof and, in case of changing employment from one industry or establishment, to an other industry or establishment, has also informed the Institution about such change of employment then, in the event of default in payment of contributions by the employer in respect of such insured person, such insured person shall have and enjoy the same rights under this Act as if no such default had occurred.


15. Refund of contributions paid erroneously: An employer shall be entitled to the refund of any contribution paid to the Institution under erroneous belief that it was payable under the provisions of this Act, and shall be entitled to the refund of excess amount of the contribution where such contribution had been paid at a higher rate than the rate prescribed;

Provided that no contribution or excess amount of any contribution shall be refunded unless an application for such refund is made within six months of the date on which the contribution was paid.

16. Extinguishment of claims to contributions: Any claims of the institution for unpaid contributions shall be extinguished in the manner provided in the regulations.






17. Employees' Old-Age Benefit Funds: (1) The Institution shall have its own fund, to be called the Employees' Old-Age Benefit Fund and may incur out of the Fund such expenditure as may be necessary for the purposes of this Act.

(2) All contributions paid under this Act and all other moneys received by or on behalf of the Institution shall be paid into the Fund.

(3) The Institution shall derive its revenues from the following sources-

(a) contribution payable under this Act and the rules ;

(b) all other payments made by the employers under this Act and the regulations ;

(c) income from investment of the moneys of the Institution ; and

{d) donations and bequests for the purposes of this Act.

(4) The assets of the Institution shall be utilized solely for the purposes of this Act.

(5) The moneys of the Institution shall be deposited in such banks as may be approved by the Board for the purpose.

18. Investments and loans: (1) Subject to rules, the Institution may, from time to time, invest any moneys which are immediately required for expenses under this Act, and may reinvest or realize such investment.

(2) The Institution may, with the previous sanction of the Federal Government and on such terms as it may specify, raise loans and take measures for discharging such loans.

19. Budget, accounts and audit: (1) The Institution shall draw up annually a budget showing the anticipated receipts and expenditure during the following year and shall submit it to the Board for the approval of the Federal Government.

(2) The Institution shall maintain accounts of its income and expenditure in such form and manner as may be prescribed.

(3) The books of account of the Institution shall be balanced on the thirtieth of June each year and its accounts shall be audited by auditors approved by the Federal Government at such time and in such manner as may be prescribed.

(4) The auditors shall at all reasonable times have access to the books of accounts and other documents of the Institution and may, for the purposes of the audit call for such explanation and information as they may require and may examine any principal or other officer of the Institution.

(5) The auditors shall forward to the Federal Government their report together with an audited copy of the accounts of the Institution.

20. Annual report: The Institution shall submit to the Federal Government au annual report of its work and activities,

21. Valuation of assets and liabilities: The Institution shall, at intervals of not more than five years, have an actuarial valuation made in the prescribed manner of its assets and liabilities:

Provided that the Federal Government may direct a valuation to be made at such other times as it may consider necessary.








22. Old-Age [Pension]: [(l) An insured person shall be entitled to a monthly old-age pension at the rate specified in the Schedule;

Provided that-

(a) he is over fifty-five years of age, or fifty years in the case of a woman ; and

(b} contributions in respect of him were payable for not less than fifteen years.

(2) If an insured person was on the 1st day of July, 1976 or is on any day thereafter on which this Act becomes applicable to an industry or establishment, –

(i) over forty years of age, or thirty-five years in the case of a woman, clause (b) of sub-section (1) shall have effect as if for the word 'fifteen' therein the word 'seven' were substituted : or

(ii) over forty-five years of age, or forty years in the case of a women, clause (b) of sub-section (1) shall have effect as if for the word 'fifteen' therein the word 'five' were substituted].

(3) Subject to regulations, the [old-age pension] shall commence as from the month following that in which the insured person satisfies the condition for entitlement thereto, provided that no benefit shall be payable retroactively for more than six months preceding the month in which an application for [old-age pension] is submitted.

(4) Insurable employment of a person for the purposes of this Act shall commence on the date from which the first contribution in respect of him becomes payable.

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