The federal cabinet decided in Karachi on July 2 that the Industrial Relations Ordinance 2002 (IRO), would be annulled and a bill tabled in the National Assembly soon to introduce the Industrial Relations Act, 2008 (IRA).

The need to amend/repeal the IRO 2002 had arisen soon after its promulgation as it was strongly criticised by labour federations because tt had curbed the trade union activities.

In order to bring about appropriate amendments in the ordinance, the Federation of Employers’ in Karachi had held intense discussions with workers representatives and came up with recommendations for some amendments in IRO 2002 which were acceptable to both the stakeholders.

The proposed changes were submitted to the government for incorporating them in the ordinance. However, the IRA 2008 should not be prepared in undue haste otherwise it will meet the same fate as the IRO 2002. The desired approach will be to hold a tripartite conference of stakeholders and seek their opinion in formulating the IRA 2008.

The federal labour minister had agreed to this proposal when the stakeholders approached him. The provisions which existed in IRO 1969 and deleted in IRO 2002 and those :not to be revived are mentioned from 1 to 5 below;

The statutory forums of Management Committee under Section 23-B and Joint Management Board under Section 23-C which had overlapping functions with the Works Council, another forum provided in the Ordinance of 1969, were withdrawn. These forums had never remained operational even in progressive companies from the inception and at the same time did not benefit the workers.

In the Ordinance of 2002 the Labour Courts has been empowered to award compensation to a worker in lieu of his reinstatement in job under Section 46 (5), in case of his wrongful termination but the power to reinstate still remained with the courts. Previously in IRO 1969, the courts had only the power either to reinstate the worker or not to reinstate him. The provision of compensation in lieu of reinstatement by court also exists in British law and is based on the logic that employment being a contract, its breach should involve damages in the form of compensation.

The IRO 2002 had rightly eliminated the penalty of imprisonment for violation of some of the provisions of law and substituted them with fines. IRO 1969 contained penalties for various contraventions of law which were applicable to both the workers and employers. On the one hand, they were required to contribute in the promotion of national economy and on the other, they were treated as criminals deserving imprisonment in case of civil violations.

In IRO 1969 Workers Unions were given the right to have a second audit by auditors of their choice which led to undesirable confrontation in the past generating a climate of distrust. Having their audit by the most ethical and professional firms is not only the preference but also the need of enlightened companies. Under these circumstances, allowing the unions to ask their employers for Second Audit gives rise to unnecessary conflict and even blackmailing which is not conducive to a congenial industrial relations environment.

Instead of restoring the Wage Commission in banks as provided in IRO 1969, the procedure of wage negotiation and dispute settlement provided in IRO 2002 should continue to be applied in this sector.

Reciprocal rights and obligations of workers and employers were introduced for the first time in IRO 2002. Its section 83 defines Code of Conduct for both employers and workers emphasizing on maintaining a balance between rights and duties of both the parties. In its absence the balance of power tilts in favour of workers to the detriment of employers who then feel that they are always at the receiving end. This provision is recommended to be retained in IRA 2008.

In view of the foregoing facts, it will be in the fitness of things for the government to initiate a tripartite discussion on changes which need to be brought in the Industrial Relations law and IRA 2008 should be enforced taking into consideration the aforementioned proposals.