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Taking the lead

March 03, 2018

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FOLLOWING a tripartite labour conference in December 2017, the Sindh government has again taken the lead by announcing its labour policy — the first from a province since the 18th Amendment was enacted. Prior to this, it had enacted 13 key labour laws, starting with the Sindh Industrial Relations Act, 2013.

Taking a deep interest in an area that also involves the noble cause of labour welfare is commendable. However, the changes should not deter local businessmen and foreign investors from setting up industrial and commercial enterprises within Sindh. In pursuance of the labour policy, the edifice will be built upon existing labour laws that have already seen drastic amendments recently.

It will, therefore, be necessary to first modify those provisions that are causing difficulties in implementation. The Employers’ Federation of Pakistan has carried out the laborious task of identifying 50 structural flaws, comprising errors, omissions and anomalies in the newly legislated labour laws. Besides rectifying these, the Sindh government also has to amend those provisions that are creating hindrances for employers to smoothly run their businesses.

Sindh’s new labour policy is highly ambitious.

For instance, under section 79(2) of the Sindh Factories Act, 2015, the conversion of sick leave from 16 days at half pay to 16 days at full pay per year has boosted workers’ absenteeism. Either the amended provision should be restored, or sick leave should be brought down to eight days at full pay per year. Similarly, the reduction in maximum limit of overtime work from 624 to 150 hours in a year under proviso to Section 8 of the Sindh Shops and Commercial Establishments Act, 2015, is causing compliance issues for employers. This limit should be increased to 1,000 hours a year, to allow flexibility in scheduling employees vis-à-vis overtime work, the payment of which is made at double the rate of the employees’ gross salary.

The Sindh Labour Policy, 2018, is highly ambitious, but this is fine given it at least recognises those areas that need to be attended to, and sets up challenging standards for employers, workers and the government. Some salient points of the policy are as follows.

First, the long standing need of consolidation and simplification of the existing 162 labour laws and rules will be fulfilled by amalgamating them into these six groups: (a) terms and conditions of employment, (b) wages, (c) occupational safety and health and working conditions, (d) industrial relations, (e) employment welfare and social protection, and (f) training and human resource development. This is an onerous task and may not be completed until the forthcoming general election. I hope that the succeeding government also realises its importance.

Second is the introduction of uniform definitions for terms such as ‘worker’, ‘employer’, ‘wages’, ‘establishment’ under all the provincial laws. What Sindh may have in mind is to bring all management and non-management staff within the scope of ‘worker’. This has already been done in the definition of ‘worker’ under the Sindh Terms of Employment (Standing Orders) Act, 2015.

This is a sensitive issue with employers, especially in progressive organisations that promote healthy trade unionism and maintain a competitive package of salaries and perquisites for their management employees. Such a definition will not only jeopardise their organisational structure but will also hamper trade unionism. If the dividing line between unionised and management employees is obliterated under the Sindh Industrial Relations Act, 2013, then everyone, including companies’ general managers, will have the right to become union members.

Third, the policy mentions that wages will be linked to performance and productivity. This is easier said than done and may give rise to bickering disputes. There is no denying that all employees of an organisation should strive to improve both the quality and quantity of their products. Ensuring compliance with the code of conduct and fulfilling job requirements will help achieve production targets. In the fully automated industries of the future, improvement in productivity will not be within the control of individual employees.

Fourth, it is mentioned that social security and EOBI will be made universal. Since the proposal has emanated from the Sindh government, it should take the initiative on this account by annulling the Sindh Employees Old-Age Benefits Act, 2014, which is still inoperative, and persuade the centre to make a constitutional provision to grant legal status to the exiting federal law. This will help remove the current difficulties of EOBI’s sustainability and pave the way for its universal application. Since social security is a provincial law, cooperation from the other provinces is needed to make it universal.

Essentially, enforcing laws based on Sindh’s first labour policy will involve huge funds. Will these be viable for the province’s existing industrial organisations?

The writer is an industrial relations professional.

Published in Dawn, March 3rd, 2018