The Industrial Relations Ordinance, (IRO) 2002 promulgated by the President on 28-10-2002 has not brought any fundamental change in the system of our industrial relations.

It, in fact, re-enacts nearly all the provisions of the IRO, 1969 with the following amendments aimed at removing some ambiguities that existed in the provisions of the IRO, 1969, strengthening the scope of workers participation in decisions making and promoting a measure of durable stability in labour-management relations by making the employers and workers aware of their rights and obligations.

Re-arrangement: In the IRO, 1969 various provisions relating to the same subject were so scattered that it was very difficult to locate or comprehend all the provisions of law relating to a particular subject. The new ordinance contains nine chapters with all the provisions relating to the respective subject grouped in the relevant chapter making it much easier to locate and understand all provisions relating to that subject.

Exclusions: In section l of the IRO, 1969, certain categories of employees of the PIA and those employed in its security department and all persons employed in the PTV and the PBC were specifically excluded from its purview. There is no such exclusion in regard to the employees of the said establishments in section of I of the new ordinance which obviously means that the Ordinance will apply to all persons employed as workmen in such establishments.

Persons employed as workmen by hospitals run on commercial basis are also covered by the ordinance. However, persons employed in the EOBI, and workers welfare institutions have been excluded from the purview of the ordinance. The new ordinance, also empowers the federal government to suspend, in the public interest, its application to any establishment or industry for a specified period not exceeding’ six months at a time.

Industry: In the IRO, 1969, the word “industry” was deemed in such a way that it was not clear as to whether, an activity, in order to be treated as an industry, should have been carried for profit, or any activity for which simply persons were employed could be treated as an industry. This position has now been clarified as according to Section 2 (XVII) of the new ordinance only an organised economic activity of producing,, goods or services for sale has been treated as an industry. An activity carried exclusively for charitable purpose has been excluded from its purview. Association/trade union/industrial dispute: Previously, the associations of workers and employers both were termed as trade unions with the same definition. In the new Ordinance the association of employers has been termed as association and that of workers as trade union with different definitions.

The definitions of trade union and industrial dispute which had a lot of ambiguities have been simplified in the new Ordinance.

Establishment: In the IRO, 1969, an establishment was so defined that even a separate office or branch of an organisation could be treated as an independent establishment. This resulted in certification of a number of CBAs in the same organization. In section 2 (XI) of the new ordinance, all the offices and branches of an organization, wherever located, have beets treated as one establishment if they have a common balance sheet and profit and loss accounts. It means there will be one CBA for the whole organization now.

The provision made in the IRO, 1969 for the determination of collective bargaining units in a large organization, however, remains unchanged in the new ordinance.

Likewise, the provisions for having one CBA for a group of establishments made in the IRO, 1969 have been maintained as they were although its implications will be somewhat different due to change effected in the definition of establishment.

Workman: In the IRO, 1969, the persons employed in managerial and administrative capacity and those employed in supervisory capacity but drawing wages exceeding rupees eight hundred per month were excluded from the ambit of workman. But as per section 2 (XXX) of in the-new Ordinance only the persons employed in managerial and administrative capacities have been so excluded. It means that all the supervisors will now be entitled to become members of the workers’ trade unions.

There can be no cavil with giving the right of association to supervisors but allowing them to become members of the workers bide unions may have certain unpleasant implications for the management. The supervisors are admittedly an integral part of management and their detachment from the management and placement on.the side of workers will certainly disturb the balance. Besides,,since the interests of supervisors coincide more with the interests of those in the management fold it will be difficult for them to adjust themselves in the new setting or for the workers to accept them in their fold.

That’s why in most of the western countries, the white collar and blue collar employees have separate unions. At the same time it may be argued that with the entry of the supervisors into the field, the leadership of the unions may slip into the hands of more educated and experienced persons as a result of which reliance on outsiders will automatically end. It will also be instructive to refer to recommendations of the Indian Second National Commission on Labour submitted to government on 29-6-2002, which say “it would be logical to keep all the supervisory personnel, inspective of their wage/salary, outside the rank of workers and of the purview of labour laws meant for workers.

All such supervisory category of employees should be clubbed along with the category of persons who discharge managerial and administrative functions” (6.20~. The said commission has, however, recommended the provision of minimum level of protection to managerial and supervisory personnel through separate arrangement. It would have rather been more appropriate if provision was made in the Ordinance, or different law was enacted on the pattern suggested by the Supreme Court in the case of the Civil Aviation Authority (1997 PLC 653) for employees not covered by the IRO, 1969, enabling the supervisors to form their own trade unions.

Contractor: Under the IRO, 1969 the principal employer was treated as an employer in relation to the workers employed through a contractor. In section 2 (X) of the new ordinance, the contractor who Undertakes to procure the labour or services of workmen for use by another person or in another establishment has been treated as an employer. It means that the person through whom workers are engaged will now be treated as an employer in relation to persons engaged through him in addition to the person who employs workers for a job of the establishment contracted to him. 8. Registration/cancellation: Under the IRO, 1969, the first two trade unions could be registered without any condition in regard to the number of members. But a third union could be registered only if it had as its members not less than one fifth of the total number of workers employed in the establishment, group of establishments or the industry with which it was connected. This limit has been raised to one fourth in section 6 (2) of the new ordinance. Section 12 of the new Ordinance also authorizes the Registrar to cancel the registration of a trade union, if it is not a contestant in the referendum for the determination of CBA, or has not applied for the determination of CBA within two months of its registration provided their exists no other in the establishment or has failed to secure at least 15% of votes per final list of voters during referendum for the determination of CBA.

Besides, previously those persons were disqualified to become officers of a trade union who were convicted for embezzlement in the funds of a trade union. Under section 7 of the new Ordinance the persons convicted of a criminal offence of a heinous nature such as theft, physical assault, murder and attempt to commit murder etc have also been so disqualified.

Transfer etc during the pendency of registration/referendum: Section 20 of the new Ordinance, besides prohibiting the transfer and punishment of an officer of a trade union, save with permission of the Registrar or Labour Court, during the pendency of the union’s application for registration as provided in section 10, also prohibits the transfer, retrenchment, termination and removal from service of any worker who is an officer of a contesting trade union, save with the permission of the Registrar, after application for holding secret ballot for determination of CBA is made to the Registrar.

The period for which a Trade Union certified as CBA as result of secret ballot shall act as CBA has been increased from two to three years.

Works Council: In the INTO, 1969, there were provisions for setting up three participative forums, namely, works council, management committee and joint management board in every factory employing, 50 or more persons/workmen and for the setting up of works council in every commercial establishment employing fifty or more workers. Section 24 of the new Ordinance now provides only for one forum in the name of joint management council in every establishment employing 50 or more persons. The council will have ten members with 40 per cent representation of workers. If there is a CBA, four of its office bearers will be the members of the council, otherwise they will be elected by the workers. The convener will be from amongst employer’s representatives. The functions of JWC include two of the functions of previous joint management board and five functions of the previous works council.

Besides, the functions of all the previous three forums were mainly confined to the extent of discussion, advice, recommendations or consultation on related matters. But this does not seem to be the case in the new Ordinance. Section 24 of the new Ordinance specifically provides that the council shall deal with all the matters enumerated therein. As a rule, when the word “deal”, used in connection with the performance of functions of a person or forum, is followed by the word “with”, the inference is that the person or forum can take some effective action in regard to all matters falling within the purview of his Or its functions.

It means that unlike the forums provided for in the IRO, 1969, the JWC will be entitled to take effective actions in regard to all matters falling within the purview of its functions. This will definitely result in encroachment, to a certain extent, over the prerogatives of the management as well as over the rights of CBA to the extent it can raise disputes about any of these matters. But whatever the critics may say, the provision, if implemented with the right earnestness, will certainly produce positive results. Absence of power to take effective steps was the main reason of the failure of the previous forums.

Lockout/strike: In section 25 of the new ordinance, the words “notice of lockout or strike” have been replaced by the words “notice of conciliation”. The rest of the procedure pertaining to the conciliation proceedings, declaration of strike and lockout remains the same as in the IRO, 1969. The substitution of the said words, does not in any way affect the right to strike and lock-out. Besides, the period of notice of conciliation has been increased from fourteen to fifteen days. Likewise, the period of bilateral negotiations starting immediately after the receipt of charter of demands has been increased from ten to fifteen days and so also the period for giving notice of conciliation on failure of bilateral negotiations has been increased from seven to fifteen days. The period on the expiry of which the appropriate govt. may prohibit a strike or lockout has been reduced from thirty to fifteen day.

Boards of conciliation/ penalties: Section 26 of the new Ordinance provides for the constitution of Boards of Conciliators ion the request of the party raising the dispute, in the case of disputes involving more than one establishment in a province or in the case of an industry at the national level or in the ease: of a dispute of national importance. It also provides for compulsory arbitration in disputes relating to public utility services.

In the new ordinance, penalties of imprisonment for unfair labour practices, breach of settlement and all other offences have been replaced by heavy fines.

Compensation in lieu of reinstatement/appeal: Section 46 of the new ordinance empowers the Labour Court to award compensation equal to not less than twelve months basic pay plus house rent and not more than thirty months basic pay plus house rent, in lieu of reinstatement in a case involving termination of employment of a workman. Section 47 of the new ordinance also provides for appeal against the award or decision of the Labour ‘Court to the High Court instead of Appellate Tribunal. This will eliminate the chances of prolonging the resolution of disputes ‘as the decisions of Appellate Tribunal invariably used to be challenged through constitutional petitions in the High Court.

Reinstatement: In the IRO, 1969, there was provision that if on appeal against the reinstatement of a workman, the Appellate Tribunal granted a stay Order, it had to decide the appeal within 20 days, failing which the stay order had to be deemed to have been vacated. In section 48 of the new Ordinance, the period of twenty days has been substituted by sixty days and there is no such provision that if the High Court does not decide the appeal within 60 days the stay Order shall be deemed to have been vacated.

Interim relief: The powers of the NIRC to grant interim relief in case of termination/dismissal as an unfair labour practice have been withdrawn.

Rights/obligations: The most positive and welcome feature of the new Ordinance is that it spells out the rights and obligations of the employers and workers.. The employers’ rights inter alia include the right to manage their businesses and use their resources, including the human resources, efficiently and effectively. Their obligations include respect for the rights of workers to employment, wages, decent living and better quality of life. The rights of workers inter alia include the right to work, the right to wages and the right of association and collective bargaining.