Court Rules Workers with 14.5 Years of Service Eligible for Pension

The Federal Constitutional Court has ruled that workers who have completed 14.5 years of service are entitled to a pension, rejecting a strict interpretation that required a full 15 years of employment.

In a judgment announced on Friday, a three-member bench dismissed five appeals filed by the Employees’ Old-Age Benefits Institution (EOBI), which had challenged earlier rulings of the Lahore High Court in favor of workers who narrowly missed the 15-year mark.

The court held that the Employees’ Old-Age Benefits Act, 1976 clearly allows service periods of six months or more to be treated as a full year for the purpose of pension eligibility. By ignoring this provision, the court said, EOBI had wrongly denied pensions to five employees who had completed more than 14 years and six months of insurable service.

The judges also set aside an EOBI circular issued in 2022 which attempted to exclude the rounding-off rule from pension calculations. The court said executive instructions cannot override statutory provisions or retrospectively deprive workers of accrued benefits.

In its conclusion, the court reaffirmed that the rounding-off mechanism is an integral part of the pension framework and exists to prevent workers from being disqualified over minor technical shortfalls.

As a result, the court confirmed that employees with 14.5 years or more of service qualify for pension, dismissed all pending appeals, and upheld the earlier pro-worker judgments.