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Ad hocism in legislating labour laws

September 15, 2013

A MOST critical law applicable to industrial and commercial establishments has been treated casually by respective governments. The Industrial Relations Ordinance 1969 (IRO) has been distorted many times.

This ordinance provided the strong forum of the representative union called the CBA, which had the authority to negotiate with their employer the terms and conditions of employment of the workers and reach an agreement for a period ranging from one to three years.

Another useful forum of the Works Council was constituted to promote measures for securing and preserving good relations between employer and his workmen. Workers representatives on this forum were also nominated by the CBA.

In 1972 three additional forums of the Shop Stewards, Management Committee (MC) and the Joint Management Board (JMB) were introduced in factories and establishments employing 50 or more persons.

Of these, the forum of Shop Stewards was different from the others as in this forum the CBA would nominate their representatives from every shop, section or department of the establishment, who would act as a link between labour and the management.

They were required to assist in the improvement of arrangements for physical working conditions and production work in their respective areas. Based on its prescribed functions, this forum was acceptable. However the seven functions of the MC and another five of the JMB were overlapping with the wide powers to bargain vested in the CBA.

Their futility can be judged from the fact that even the most law-abiding companies could not make them operational despite their best efforts. Unfortunately, the unnecessary functions of these two forums have continued to exist in all the subsequent promulgations of the law, i.e. IRO 2002 and Sindh Industrial Relations Acts of 2008, 2010 and 2013, respectively.

Under Section 24 of the Sindh Industrial Relations Act, 2013, functions of the Works Council and these two forums have been combined to make a new forum of the Joint Management Council with 14 functions, majority of which are already discussed during bargaining sessions between the employers and their CBAs. The merger of the three into one forum has even eclipsed the effective role of the Works Council for a manufacturing organisation.

After the 18th Amendment the subject of labour legislation was transferred to the provinces but the Employees’ Old-Age Benefits Act (EOBA) 1976 and the Companies Profits (Workers’ Participation) Act 1968 continue to be managed at the federal level.

This situation is causing anomalies of implementation. For instance, under Section 9 of the EOBA contributions on behalf of the employees are paid at the rate of his minimum wages as prescribed under the Minimum Wages for Unskilled Workers Ordinance, 1969. Since the minimum wage is now fixed by the respective provinces, currently there is a difference in the rate of wage amongst them. However, the minimum wage for the purpose of paying the contribution is determined by the Institution formed under the EOBA.

The Workers Welfare Fund is constituted under the Workers Welfare Fund Ordinance, 1971. The huge amounts transferred to this Fund by the companies under the scheme set out in the Schedule to the Companies Profit (Workers Participation) Act, 1968, go to the federal government and utilised by it instead of being allocated to the provinces.

Besides, the employers have to face other issues relating to the disbursement of the Workers Profit Participation Fund, which need to be resolved.

Labour laws may be low on the priority list of the federal government but it should pay some attention to eliminate the glaring inconsistencies of the above laws and remove the avoidable difficulties which the employers have to encounter in their implementation.