Labour amendments

October 25, 2018


The writer is an industrial relations professional.
The writer is an industrial relations professional.

THE 18th Amendment was passed in April, 2010, but a controversy still rages: should it be rolled back? Realistically, after a constitutional amendment, or in fact an amendment to any law, is passed, it is difficult to reverse or nullify the same without compelling reasons. It should also be remembered that the 18th Amendment was formulated after comprehensive deliberations by a parliamentary committee, comprising members from all parliamentary parties, to meet the long-standing demand of provincial autonomy.

Devolving health, labour and education to the provinces through this amendment has created issues, but not of such a magnitude that they can’t be addressed. Take labour. The Sindh government boasts of devolving the highest number of labour laws in comparison with the other three provinces. While this may be so, Sindh has made unbridled amendments to the laws, thus jeopardising the interests of both employers and workers. It is ironical that the 18th Amendment came about when the PPP ruled at the centre. Now it is the PPP provincial setup that is making such amendments, which will scare off investors.

After devolution, two categories of companies have emerged for the application of labour laws, those which exist only in one province and those which exist in more than one province. The Federal Industrial Relations Act, 2012, has been enacted for the industries located within the Islamabad Capital Territory and trans-provincial companies.

Some key laws should go back to the centre.

Since the 18th Amendment is here to stay, I have mentioned some key labour laws, which should remain with the provinces and at least three which need to go back to the federal government. The three are welfare laws and their return to the federation will not only ensure their survival but also be instrumental in continuing to achieve their purpose.

The Industrial Relations Ordinance, 1969: All provinces and the centre have promulgated their respective industrial relations acts after devolution. They are similar to each other and meet the spirit of the 1969 ordinance. But a major difference between the federal and provincial acts is that there is no duration of collective labour agreements prescribed by the former, while in the provinces they can only be reached for a maximum of two years.

The Industrial and Commercial Employment (Standing Orders) Ordinance, 1968: Provinces other than Sindh have almost adopted the 1968 ordinance; however, Sindh has not only changed its name but also made drastic changes to it. The Sindh Terms of Employment (Standing Orders) Act, 2015, has made it applicable to all employees of a company including management staff, but excluding the occupier and manager. In addition, the outsourcing of services has been prohibited. Both these changes have negative repercussions for industries.

Factories Act, 1934: This act was already administered by the provinces prior to devolution, so nothing significant has taken place. However, taking advantage of the privilege to make amendments to the act, Sindh has prohibited the contracting out of services and promoted absenteeism by doubling the quantum of sick leave for workers.

Shops and Establishment Ordinance, 1969: KP has extended its act of 2015 to establishments, to which it did not apply previously such as educational institutions, health centres, labs, hotels, cinemas etc. Besides, overtime limits have been made realistic as an employee can now be engaged in such work for 24 hours per week, which was previously 150 hours per annum. The other provinces should also adopt this provision.

Employees Old-Age Benefits Act, 1976: If this most beneficial of welfare laws is to survive, its status as a federal law should immediately be res­tored through a constitutional amendment. This will stop many controversies and litigation affecting the act, bringing relief to pensioners.

Companies’ Profits (Workers’ Participation) Act, 1968 and Workers’ Welfare Fund Ordinance, 1971: As KP and Balochistan have fewer industries, they, along with Punjab, continue to be governed by the act of 1968 as they have not devolved it. Only Sindh has done so, giving rise to controversies and litigation in the superior courts. The bulk of money collected under both enactments goes to the welfare fund constituted under the 1971 ordinance.

Prior to devolution, these funds were collected by the FBR and would then be transferred to the provinces according to prescribed ratios. The money generated was supposed to be spent on the construction of houses for workers, their education, training, re-skilling and financing of other welfare measures for them. This process has been discontinued since 2010, and requires immediate revival. Let these two laws also be transferred to the centre through the same constitutional amendment as that for the EOBI.

The writer is an industrial relations professional.

Pulished in Dawn, October 25th , 2018

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