Employers have always been agitating against the law allowing participation of outside labour leaders in a trade union's executive to the extent of 25 per cent. This provision of law was introduced in the Industrial Relations Ordinance, 1969 (I.R.O.) through an amendment in October 1970.

The government's objective was that the outside labour leaders would provide professional advice to the employed union leaders in an establishment, with regard to labour laws and industrial relations practices, whereby the union affairs would be managed more effectively.

The experiment soon turned out to be counter-productive as most of the outside labour leaders took it as an opportunity to make quick fortune from the power given to them by law.

They exploited local labour leaders of establishments and at the same time blackmailed employers. Resultantly there were serious incidents of indiscipline, illegal strikes and lockouts, which led to the closure of a number of factories.

Employers believed that the root cause of all this trouble was the induction of outside labour leaders into their union's executives. Whenever the government has sought suggestions from employers for improvement and amendments in labour laws, one of their key proposals, has been the repeal of this provision from the statute book.

One interesting judgement to this effect was given by the Sindh High Court reported in the Pakistan Labour Cases in 2001, in a case titled, "Habib Sugar Mills Limited versus the Registrar of Trade Unions, Government of Sindh and another". Following this judgement, most employers are under the impression that the outside professional labour leaders can no longer become office bearers of a union. In this case, a terminated supervisor of a mill formed a third union for the establishment and himself became its general secretary.

He applied for registration of the union without informing the Registrar of Trade Unions that he had already been declared as a non-workman in his petition for reinstatement before the Labour Court and appeals before two higher courts. Registration of this third union by the Registrar, was challenged by the mill management before the Sindh High Court. While discussing the case, the court in its judgment gave following comments on the IRO. 1969's provision allowing participation of outside labour leaders in a union's executive:

"This provision only says that 75 per cent of the office-bearers of a trade union shall be from amongst the workmen actually engaged or employed in the industry. Twenty-five per cent, according to the learned counsel for the union, can be outsiders.

According to him, this 25 per cent can be any persons even if they are non-workmen. Such an interpretation will be that 25 per cent outsiders should also necessarily be in the category of workman through not employed in the employment where the Union is applying for registration.

"This interpretation will be in consonance with the essence and spirit of the law. Section 7(2) of IRO, 1969 provides a Trade Union of Workmen shall not be entitled to registration under the IRO 1969 unless all its members are workmen actually engaged or employed in the industry with which a trade union is connected.

There is no room under the circumstances for a non-workman being member or holding office in the Union even under 25 per cent quota for "outsiders". These outsiders should also be in the category of workmen or else there is nothing to prevent even employer from forming his own Union in his establishment holding office of president and general secretary of the Union from amongst 25 per cent outsiders quota and thus, frustrating the very essence and spirit of the IRO 1969."

Based on the reasoning that the third union's general secretary was a non-workman, when he was in employment of the mills, the High Court held that the registration of his union by the Registrar, was illegal. It appears that the aforesaid remarks of the court were restricted to the case in hand as even after this judgement, outside labour leaders continue to function as office bearers in the local unions and their inclusion as such has not been challenged by companies. Nor there is any further case law clarifying the position in relation to other companies.

The revised IRO promulgated in October, 2002 still carries the same provision for participation of outside labour leaders in a union's executive to the extent of 25 per cent, as the previous IRO and there is no change in their status.