By: PARVEZ RAHIM


THE Industrial Relations Ordinance, 1969 is the last of the labour laws enacted to oversee the running of industrial and com*mercial enterprises. The process of labour welfare legislation began with the first PPP government in 1971 led by Zulfikar Ali Bhutto.

Bhutto followed through with his promise to make Pakistan a welfare state, which was the reason millions among the down*trodden masses voted for his party. A total of five labour welfare laws were passed by his government, out of which the

Emp*loyees Old-Age Benefits Act, 1976 was the most significant. After Bhutto, Gen Ziaul Haq promulgated the Disabled Persons (Em*p*loyment and Rehabilitation) Ordinan*ce, 1981.

Since then, four more pieces of legislation dealing with workers’ welfare orientation have followed. Some of the laws were promulgated either due to political expe*di*ency or to pressure from international bodies. Laws such as the Employees’ Cost of Living (Relief) Act, 1973 and the Employees’ Special Allowance (Payment) Act, promulgated by all the four provinces from 1986 to 1992, pertain to the former category.

Labour laws have become confusing and contradictory.


The Employment of Children Act, 1991 and the Bonded Labour System (Abolition) Act, 1992 fall within the latter classification. Due to haphazard induction of various acts and ordinances, respective governments have had to constitute labour commissions to simplify and consolidate the labour laws for the benefit of local employers and in order to attract foreign investment. Those commis*sions formulated a number of pragmatic reco*m*mendations but, for unknown reasons, they were shelved by the governments in power.

Over a period of four decades, labour laws have become unwieldy, confusing and contradictory, a state of affairs that has become particularly serious after the 18th Amendment. The existing labour laws are based on 36 ILO conventions that have been ratified by Pakistan. As the responsibility to ensure compliance with these rests with the federal government, labour should not have been devolved to the provinces, for they are not accountable to the ILO.

This lacuna in the devolution process becomes more even more glaring in the case of laws relating to social protection schemes such as old age pensions, workers’ profit participation and administration of social security medical benefits. Over the last few years, labour federations have been strongly advocating and demanding that the federal government continue the management of these schemes.

When the 18th Amendment was passed, the central government was led by the PPP. However, it was only much later, in mid-2013 when the party was no longer at the centre, that the PPP-led Sindh government devolved the Companies Profits (Workers’ Partici*pation) Act, 1968, Workers Welfare Funds Ordinance, 1972 and the Employees’ Old-Age Benefits (EOB) Act, 1976 — all of which were, incidentally, money-generating laws. More*over, it was the only province to take such an action. Punjab, Khyber Pakhtun**khwa and Balochistan have not devolved them so far, anticipating that it may be counterproductive to the interests of their workforce.

Nevertheless, so many anomalies and discrepancies have crept into existing labour laws formulated by the provincial govern*ments that trans-provincial companies are baffled as to the terms and conditions of employment they should follow in respect of their workers. Even their legal advisers are hard-pressed to come up with workable solutions.

In a recent judgement, the Supreme Court has held that amendments effected in labour laws through the finance acts of 2006, 2007 and 2008 were un*lawful because the levies they imposed were fees and not taxes. The amend*ments should therefore have been effected through the relevant legis*lative procedure prescribed under the Constitution. In the light of this judgement, immediate action is required by the provincial governments to restore those benefits to workers by following the correct legislative procedure.

The Employees Old-Age Benefits Insti*tu*tion (EOBI) is currently in serious trouble, entangled in issues generated primarily because of the 18th Amendment. It is unable to increase monthly contributions by emp*loyers’ based on the current minimum wage, nor is it in a position to increase retired employees’ monthly pension of Rs5,250, in effect since April 2015. Employers are making monthly contributions at different rates and the EOBI cannot enforce a uniform rate.

The federal government should therefore immediately come to the EOBI’s rescue and undo the EOB Act’s devolution through a constitutional amendment so that the scheme is put on the road to recovery. Despite having been roiled by some big scams, the EOBI was managed smoothly before devolution in 2010, but it has now reached a stage where its very existence appears to be in jeopardy. It is unfortunate that this is the treatment being meted out to the most beneficial labour welfare legislation ever enacted in Pakistan.

Source: https://www.dawn.com