June 16, 2007	Saturday	Jamadi-ul-Awwal 30, 1428

ISLAMABAD, June 15: The government has proposed a range of amendments in the labour laws to ensure maximum benefits to low skilled workers in the budget 2007-08.

Through the finance bill 2007, an amendment has been proposed in the companies profits (workers participation) Act 1968, the contract workers will be eligible for workers profits participation fund (WPPF).

The bill proposed amendments in Clause (f) i.e. definition of worker by virtue of which the contract employees (even hired through contractors) shall now become eligible worker for the purpose of this Act.

It may be recalled that the Finance Act 2006 introduced amendment whereby the eligibility criteria and maximum limits of payment to workers was increased.

The bill now proposes that any worker drawing average monthly wages up to Rs7,500 shall be entitled for four units of the Fund whereas previously such limit was Rs5,000.

Similarly, the limits for the workers entitled for two units have also been raised to Rs15,000 as against the existing limit of Rs7,500.

Most significant change has been introduced in the maximum limit for the workers entitled for one unit where the upper limit fixed at Rs10,000 has been done away with.

As a consequence every worker, as defined under the Industrial Relations Ordinance, 2002, shall be eligible for at least one unit of the Fund.

The Bill further proposes to increase the limit of maximum allocation to four times the minimum wages for unskilled workers, which works out to be Rs18,400.

Through an amendment in the minimum wages for unskilled workers ordinance, 1969, the bill proposes to raise the level of minimum wages for unskilled workers from the present Rs4,000 per month to Rs4,600 per month.

Under an amendment in Workmen’s Compensation Act, 1923, definition of a workman for the purpose of this Act provides a maximum limit of monthly wages of Rs3,000 for the purpose of eligibility for compensation under the said Act.

Notwithstanding, the basic definition of a workman, through Finance Act, 2006 the wage bracket as appearing in Schedule IV to the said Act was increased to Rs6,000 per month resulting in an anomaly. In addition, it is also worthwhile to note that the Finance Act, 2006 increased the minimum wages for unskilled worker to Rs4,000 per month which are now proposed to be further increased to Rs4,600 per month.

The proposed amendment will do away with these limits for the purpose of eligibility for compensation under this Act.

Through an amendment in West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance, 1968, the schedule, Order 12, Clause 6 mandates payment of gratuity for each industrial and commercial establishment. At present, there is a proviso which provides an option to offer a provident fund scheme subject to certain conditions instead of gratuity.

The Bill proposes to add another proviso whereby, if through collective bargain, the employer offers and contributes to an approved pension fund not less than 50 per cent of the limit whereas the remaining portion is paid by the workman, gratuity shall not be applicable.

Another amendment in Employees Old-age Benefits Act, 1976, the Bill proposes certain amendments by virtue of which the minimum pension and survivor’s compensation will increase. In addition, the formula for calculation of pension has also been revised whereby pension shall now be computed on last wages / salary instead of average salary for last twelve months.