CONSEQUENT to the 18th amendment passed in April 2010, the sphere of labour legislation was devolved to the provinces by eliminating the concurrent list from the Constitution. By virtue of this amendment, a new term of trans-provincial companies emerged, which carried on business in more than one province.

Their status was also legally recognised when the federal government promulgated the [Federal] Industrial Relations Act, 2012. The preamble of this Act stated that it would extend to the Islamabad Capital Territory and to the trans-provincial establishments and industry.

Later, while expressing their views in this regard, some judges of the superior courts said that the federal labour laws existing at the time of devolution would continue to apply to the companies having establishments in more than one province.

However, officials working in the government institutions and departments do not subscribe to this view and force the management of trans-provincial companies to follow the provincial laws.

Recently the Punjab Employees’ Social Security Institution (PESSI) has stopped providing medical treatment and other facilities to the ‘secured’ employees of a trans-provincial company in Lahore, as the latter has switched over to the payment of monthly contributions on their behalf, based on the federal law.

Employees covered under the social security law are called ‘secured’ employees. The existing rate of monthly contribution payable by the employers under the federal law named the ‘Provincial Employees’ Social Security Ordinance, 1965’ is six per cent of Rs10,000, and, under the Punjab Act, it is 6pc of an employee’s monthly salary between Rs17,500 and Rs22,000, on behalf of every ‘secured’ employee.

By refusing to provide medical benefits to the ‘secured’ employees of the company, and their families, PESSI is flagrantly violating the provisions of section 24 of the Ordinance, which safeguards the rights of ‘secured’ employees in the event of default of payment of contributions by their employer. The law provides that unless the ‘secured’ employees have connived at such default, they will have and enjoy the same rights under the ordinance as if no such default had occurred.

In this case, there is no such connivance between the employees and the employers, and PESSI has unlawfully stopped providing medical treatment and other facilities to them, which they and their families had been receiving for the last many decades.

PESSI should, therefore, immediately restore the provision of medical benefits to the company’s ‘secured’ employees and get its dispute, if any, sorted out in the court.

Parvez Rahim


Published in Dawn, February 18th, 2021


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