| September 25, 2002 | Wednesday | Rajab 17, 1423 |
Please Visit our Sponsor (Ads open in separate window)
NFC balancing act
IN a long-awaited response to the challenges posed by globalization and economic stagnation at home, the government has finally announced the country’s fifth labour policy. Aimed at reconciling international labour and trade union laws with those governing industrial relations in Pakistan, the new policy revamps and consolidates the existing — some 36 — labour-related laws into six. These pertain to key areas affecting the labour force in Pakistan, including industrial relations, conditions of employment, wages and remuneration, human resource development, occupational safety and health, and labour welfare and social protection. Unveiling the new labour policy, the federal minister for labour, manpower and overseas Pakistanis said that a consensus had been achieved among all stakeholders before finalizing the new policy. The last labour policy was formulated in 1972, and was largely seen as being detrimental to the globally changing and ever-evolving character of the industrial sector.
Since 30 years of experience of the many failures and a few successes in the country’s industrial sector has gone into its making, the new policy has attempted to strike a reasonable balance between the interests of both labour and the industrialist. Also, following the global industrial model, it reduces the role of the government to that of a facilitator rather than an overseeing authority. Whereas the new policy limits the legality of strikes and abolishes appellate industrial tribunals, it establishes a joint management council and a board of arbitrators to adjudicate industrial disputes, and gives the appellant the right to challenge the orders passed by a labour court in a high court. The ordinance pertaining to labour welfare and social protection calls for setting up an independent tripartite board of governors at the provincial level with representatives of employers and employees, and the government as facilitator. The board would oversee measures being taken and implemented by employers for the general welfare of employees and their families, including provision of education for employees’ children up to intermediate level. The tripartite board puts an end to the regulatory role of the labour department.
The ordinances relating to conditions of employment and wages make it binding on all industrial and commercial establishments with 10 or more employees to define roles, responsibilities and duties of the employer and the employee. These include work hours, industrial/commercial routine, provision of overtime, and implementation of the minimum wage of Rs 2,500 per month, which would be revised every three years. The laws would also protect the rights of the employees hired on contract by redefining temporary jobs in accordance with prevailing international standards. The new policy also envisages gender equality at the workplace and provision of equal opportunities and wages for women. It categorically bans child and bonded labour.
As for the labour force in the agriculture sector, the relevant ministry is also in the process of formulating a separate policy. Hopefully, this would also revamp rules and regulations pertaining to absentee landlordism and public sector entities acting as such in cases where farms are leased out to tenants on unfavourable terms and conditions that go back to colonial times. Rural workers — both men and women — have been long denied their basic rights and subjected to appalling working conditions and kept at a subsistence level of livelihood. Here, too, it would make sense to involve all stakeholders and arrive at a policy that is in conformity with international standards governing the agriculture sector. This may call for a more active role for the government, as is the case in many other countries where governments subsidize agriculture. Agriculture remains the backbone of Pakistan’s economy, and it is high time it was streamlined on modern lines, both in terms of farming techniques and rules governing the labour force that tills the land without either fair wages or an equitable share in the produce.
WITH the resolution of three main outstanding issues, the National Finance Commission has moved forward to the finalization of the award which is likely to come about early next week. The intention seems to be to put together the award before the forthcoming elections. For the three remaining issues the commission has set up working groups which will meanwhile thrash out the different points of view and come up with a final draft to be presented to the cabinet for approval. The award is already one year late. The centre and the provinces have firmed up the ratio of 60:40 for the sharing of the divisible pool of revenues. Until now, the federation had kept 62.5 per cent and the provinces were given 37.5 per cent.
With the new dispensation, the provinces’ share will increase by 2.5 per cent and to that extent improve their finances and strengthen their capacity to undertake development projects. Other points of agreement cover the continuance of the sharing of the provincial pool on the basis of population. However, the reference point in this regard would be the census of 1998 and not that of 1981 as has been the case hitherto. With this change, Sindh’s share will increase by a little less than one per cent. The third point that has been agreed upon is the size of the subvention pool which has been fixed at Rs 20 billion — Rs 15 billion to be contributed by the centre and five billion rupees by the provinces in the proportion decided upon for the sharing of the divisible pool among the provinces. Since Sindh has been included among the beneficiaries of the subvention pool along with the NWFP and Balochistan, it may get an additional amount of about Rs 600 million this year.
The points that still remain to be settled include the criteria for distribution among the provinces of 2.5 per cent of GST revenues to be given as compensation for the abolition of octroi, etc; fixing the share of the provinces in the gas development surcharge; the Wapda-NWFP dispute over hydropower profits; and the question of the federal debt of the provinces.
On the distribution of 2.5 per cent of the GST proceeds to be made available to the provinces, three criteria are said to have been discussed. Population is one; the amount of revenue generation within the territorial limits of a province is another; and collection from octroi and district taxes before their abolition is the third. Generation of revenues seems to be the most desirable and equitable determinant from the point of view of efficiency, but initially weightage may also have to be given to the factor of last collection from octroi because that determines the current requirement. Resolution of the other three issues of the gas development surcharge, the Wapda-NWFP dispute and the outstanding federal debt of the provinces seems doubtful in a week’s time. Their solution is likely to be put off as has been the case with many other complex issues. The share of hydropower profits of the NWFP, which was capped at six billion rupees, has been uncapped. For the time being the province will share profits according to the use of its water. About provincial debts, the federal government has already made it known that repayment instalments will continue to be paid as at present, although the provinces will be allowed to negotiate concessional foreign loans to pay off expensive commercial debt. Thus they may get some relief.