Social security fund: PESSI moves SC against stay order by LHC

Petitioner says employers must pay to employee at the rate of 6%

ISLAMABAD: The Punjab Employees Social Security Institution (Pessi) on Saturday approached the Supreme Court against a stay order from the Lahore High Court (LHC) over non-receipt of social security fund by industries in the province meant for workers’ welfare.

Pessi, through its counsel Raheel Kamran Sheikh, filed a petition under Article 185(3) of the constitution against the LHC’s stay order of February 28.

According to the petition, Pessi was established under the Provincial Employees Social Security Ordinance, 1965 (1965 Ordinance) and has been operational since March 1, 1967 for providing benefits to certain employees or their dependents in the event of sickness, maternity, employment injury or death.



The petition says that the institution is also responsible for the medical care of dependents, injury benefits, disablement pensions and gratuity, survivor’s pension, death grant in case of death and medical care in case of employment injury, etc. It is also providing health care facilities and cash benefits to its secured workers and their dependents employed in industrial and/or commercial establishments operating in Punjab.

It says that Section 20 of the 1965 Ordinance (as amended till date through the Punjab Amendment Act XXIV of 2013) sets the rate of contribution to be paid by the employer. It provides that every employer shall, in respect of every employee, whether employed by him directly or through any other person pay to the institution “at such times at not more than six percent” subject to such conditions as may be prescribed.

Section 71 of the ordinance, according to the petition, pertains to review and modification of wage limits, contribution and benefits, vests in the government the power to modify the wage limits. It provides that in January each year, the Governing Body shall review the wage limits specified in clause (f) of sub-section (8) of Section 2 and the rates of contribution and benefits provided under the Ordinance in the light of any changes in wage levels or living costs and shall submit a report thereon together with its recommendations to the Government.

The Government may, after considering the said report and considerations, by notification, enhance or reduce the wage limits specified in clause (f) of sub-section (8) of Section 2 or the rates of benefits payable under the Ordinance.



On December 19, 2017, eight different industrial companies filed writ petitions in the Lahore High Court inter alia challenging vires of the amendments brought about in the 1965 Ordinance through the Amendment Act XXIV of 2013, in particular the Sections 2(8)(f), 20 and 71.

On December 21, 2007, the LHC judge in chamber granted interim relief to the respondents. Later, the petitioner approached the judge in chambers with an application for vacation of the ad-interim injunction.

The said application was heard on February 28 last year, but the request for the vacation of stay order was not entertained.

The petitioner requested the SC to set aside the LHC’s February 28 stay order.