Contents

Acknowledgements

I.                   Introduction

II.      Labor Market Indicators

II.1      Employment Situation

II.2      New Forms of Employment and Areas of Concerns

III.           Legal Framework and Industrial Relations

 

III.1     Labor Policies in Pakistan: A Brief Overview

III.1.i  Labor Policy 1955

III.1.ii   Labor Policy 1959

III.1.iii     Labor Policy 1969

III.1.iv     Labor Policy 1972

III.1.v  Labor Policy 2002

 

III.2     Industrial Relations

III.2.i  Industrial Relations Ordinance, 1969

                        III.2.ii Industrial Relations Ordinance, 2002

III.2.iii     Industrial Relations Act, 2008

III.3     Punjab Industrial Policy 2003

            III.4     Developments during 2003-2007

                        III.4.i  Labor Protection Policy 2006

                        III.4.ii Labor Inspection Policy 2006

III.5     Escape from Labor Laws: Export Processing Zones

IV.     Workers' Organizations

IV.1     Trade Unions Membership

IV.2     Trade Union National and Industrial Federations

V.      Employers' Organizations            

 

VI.     Wages

VI.1     Trend in Real Wages

VI.2     Public Sector Pay Structure

VI.3     Industrial Workers Minimum Wage Fixation System

VI.4     Income Distribution

VII.           Collective Bargaining

VII.1   Legal Provisions for Collective Bargaining

VII.2   Collective Bargaining Agreements

VII.2.i Two Consecutive Collective Bargaining Agreements

VII.2.ii Two Collective Agreements of a Company Having Plants in

Different Citifies

VII.2.iii Collective Agreements of Mineral Development Related Public   

Sector Organizations

VII.2.IV Two other Collective Agreements

VII.2.V Collective Agreements Reached after Industrial Action and

Conciliation

VIII.        Dispute Settlement

VIII.1  Procedures for Dispute Settlement

VIII.1.i   Bilateral Negotiations

VIII.1.ii Conciliation

VIII.1.iii Arbitration

VIII.1.iv Strikes and Lock-outs

VIII.1.v Labour Courts

VIII.1.vi Labor AppellantTribunal 

VIII.1.vi High Court

VIII.2  Industrial Disputes and Work Stoppages

IX.              Tripartism and Social Dialogue

IX.1     Workers Employers Bilateral Council of Pakistan (WEBCOP)

X.                 Conclusions

 

 

Bibliography

List of Tables

 

 

 

 

List of Tables

 

Table 1                         Labor Market Activity of the Population (10+)

Table 2                         Distribution of Employed by Region

Table 3                         Percentage Distribution of Employed Persons by Major Industry

Table 4                         Regional Distribution of Employed Persons by Employment    

                                    Status

Table 5                         Percentage Distribution of Non-Agriculture Workers in the     

                                    Informal Sector

Table 6                         The Vulnerable Nature of Employment of “Employees”

Table 7                         Major Labor Legislation in the Area of Industrial Relations,   

                                    Employment and Service Conditions

Table 8                         Number of Registered Unions and Collective Bargaining   

                                    Agreements with Membership in 2001 by Provinces

Table 9                         National Federations with Membership Declared and Registered

                                    with National Industrial Relations Commission

Table 10                       Some other National Federations with Affiliated Unions and

                                    Membership

Table 11                       Industrial/Sectoral Federations with Affiliated Unions and

                                    Membership

Table 12                       Employers Federation of Pakistan Affiliated Trade Bodies

                                    With Membership

Table 13                       Workers Daily Nominal and Real Wage Rates of the

                                    Construction

Table 14                       Trends in Daily Agricultural Wages

Table 15                       Household Income Distribution in Pakistan

Table 16                       Household Income Distribution by Rural-Urban Areas

Table 17                       Salient Features of Collective Bargaining Agreements

                                    Of a ISO Certified Worsted Fabrics Producer

Table 18                       Salient Features of Collective Bargaining Agreements

                            Of a Public Sector Insurance Company

Table 19                       Salient Features of Collective Bargaining Agreements

                                    Of a Tobacco Company for its Two Plants

Table 20                       Salient Features of Bargaining Agreement of Mineral    

                                    Development Related Corporation 

Table 21                       Salient Features of Bargaining Agreement of a Coal Project of    

                                    Mineral Development Related Corporation

Table 22                       Salient Features of a Collective Bargaining Agreement

                                    Of a Mill Showed no Net Profit in the Preceding Year

Table 23                       Salient Features of a Collective Bargaining Agreement

                                    Of an Oilfield Company

Table 24                       Salient Features of Collective Bargaining Agreements of Cement   

                                    Factory after Industrial Action and Conciliation

 

Figure 1                        Unions and Membership

Figure 2                        Trends in Work Stoppage

Figure 3                        Workers Involved and Man days Lost (in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Evolution of Industrial Relations System in Pakistan

 

Sabur Ghayur[1]

I.                  Introduction

 

            The industrial relations system refers to the regulatory framework and a mechanism that governs workplace relations. It is defined as “the interaction between employers and employees or their representatives and the mechanism by which the standards and other terms and conditions of employment are negotiated, adjusted and enforced” (Azucena, 1999). Thus, an industrial relations system establishes rules that govern this process. Harmonious industrial relations promote efficiency, productivity and decent work. Indeed, a participative and mutually respecting industrial relations advance cooperation, enhance productivity and promote trust thereby reducing antagonism and exploitation. Besides the government, employers’ and workers’ organizations are the key players in industrial relations system. However, the role of unions is unique in addressing the core issues of wages, working conditions and job security. Indeed, enabling environment is the outcome of the government policies duly endorsed by the social partners, namely: employers and workers.

 

Social development and well-being of all, without any discrimination, has now come to be globally accepted as pre-requi­site to future progress of human society. This realization has emerged in the wake of global transformation that has failed to address poverty, unemploy­ment, inequality and the breakdown of the social fabric. This process has been found associated with dismantling of labor protections. Labor market flexibility is the “buzzword” and a surge in the irregular work is the outcome. Serious labor market implications are the most commonly observed phenomenon. It is not only the unemployment and poverty that is raising concerns; equally disturbing is the quality of employment. Many employed are found working in conditions that are far off the yardsticks as laid down in the “decent work”.

 

 

The mergers and acquisitions (M&As), though important to stay competitive, invariably accompany layoffs, redundancies, dismissals or at best job relocations. Adequately evolved and implemented employment protection mechanisms could have been an important instrument in addressing this issue. The growing inter-industry linkages as manifested in M&As, establishment of subsidiaries, supply chains, and production and marketing networks are also found leading to yet another issue of concern. It is none else than employers’ lack of attention to their responsibilities towards an environmentally sustainable production, respecting to global standards including Core Labor Standards (CLSs) as well as to the society and cultures where they operate. The investment policies targeting investors and more so foreigners and multinational corporations (MNCs) with offering host of incentives and concessions, even relaxation in labor laws is not uncommon (Suzuki & Ghayur 2003 and Ghayur 1997).

 

These developments nonetheless have implications for the workforce, employment and working conditions. In fact, job, income and retirement benefit losses are the fate accompli of working men and women and the work aspirants. A system of bi- and tri-partism well in place is a pre-requisite for ensuring a social dimension of development pursuits of a country and providing a level playing field to the workers and employers. In fact, the role of industrial relations in the wake of globalization and especially in the current onslaught of “global meltdown” is getting even more important. It is, for example, crucial in building consensus on labor market flexibility, employment protection and social security. Respect and implementation of labor rights is funda­mental in creating conditions of work in freedom, dignity, security and equal opportunity for all. Thus, industrial relations are the key to a peaceful and economically prosperous society based on social justice and equitable distribution of development benefits. Engaging in policy dialogue is a dimension increasingly attributed to and taken up by the unions especially in the wake of liberalization, privatization and deregulation; a role now acknowledged for the labor movement (Suzuki and Ghayur, 2003 and Lee and Rhee, 2001).

 

I.1        The Pakistan Scenario

 

The role of industrial relations in Pakistan is increasing due to the changing structure of economy with growing share of industrial sector. It is, nevertheless, important to emphasize that Pakistan’s labor movement – an important stakeholder - despite the merger of three affiliates of the international confederation of trade unions (ICFTU) into Pakistan Workers Federation (PWF) in September 2005, still remains splintered along ethnic, sectarian, linguistic and regional lines. Trade union federations are often centered on personalities[2]. Few of them attempt to organize at the grass-roots level and tend to compete for the loyalty of the various enterprise-based unions; thus promoting instability. Over the past 10-15 years, average membership has stabilized at about 135 member per-union, down from nearly 2,000 immediately after independence. Union dues are not paid in many instances; hence incomes of trade unions are low. This seriously affects their activities and services to members and creates dependence on external funding for their trade union work (Nasir 2006 and Ghayur 2006).

 

 

 

Pakistan's labor movement no doubt operates under a barrage of restrictive laws. The Government has powers to legally intervene in the internal affairs of the unions. Hostility from employers and at times by officials is not uncommon. No wonder, attempts to form unions are loathed and resisted (Ghayur, 1996). The current number of organized workers is minimal with an estimated 6.3 percent of the non-agricultural labor force and a mere 2.2 percent in unions with collective bargaining status. Major blocks of workers are excluded from trade unionism by law, including the agricultural sector (about half the work force), teachers, health workers, civil servants and public sector workers. Even, workers of export processing zones/special economic zones as yet have not been able to get their right to organize and collectively bargain (Nasir 2001 and Ghayur 1993).

 

Such a situation notwithstanding, the labor movement did resort to a nation wide industrial action in late 1960s. The introduction of two legislations, namely: Industrial Dispute Ordinance 1968 and Trade Union Ordinance 1969, creating unrest among the workers. These laws  not only  banned the  fundamental  right of the  workers to go on  strike but  also  the office bearers of  the  trade union  could be suspended  and  registration  of  the  union  cancelled  by the  executive order of Registrar of trade unions.  

 

This “retrogressive” labor legislation also brought all the national federations under one umbrella to develop and maintain unity by forming “Joint Labor Council". Despite the ban, they went on strike to press their demand in major public utilities including Railway, Telephone, Postal and Electricity. The country wide strike call of March 1969 led to the shut down of electricity supply in major cities for two hours during evening. This struggle, no doubt, played an important role in highlighting labor issues to political parties and policy makers. Consequently, the Pakistan Tripartite Labor Conference (PTLC) in 1969 was convened. The PTLC led to the passage of industrial relations ordinance 1969 duly incorporating concept of electing collective bargaining agent through secret ballot by the workers.

 

These observations notwithstanding, the developments and policy initiatives in this decade are pointing towards efforts safeguarding and protecting rights of working women and men. Pakistan Decent Work Country Program (PDWCP) was launched by the Government together with social partners in September 2005. It was followed by ratification of the remaining CLSs by the Government. The year 2006 witnessed the approval of Labor Inspection Policy and Labor Protection Policy by the Cabinet. Laws dealing with employment and working conditions have been merged and daft Employment and Service Conditions Act (ESCA) has been prepared and circulated during the PTLC held in February 2009[3]. The National Employment Policy (NEP) with the vision to promote decent work for all was prepared and widely circulated in the second half of 2007. It was followed by stakeholders’ consultations in all the provincial capitals. The NEP was finalized in early 2008. The National Emigration Policy (NEMP) with a focus on promoting emigration, protecting emigrants, welfare of left behind and effective ere-integration of returning migrants, prepared and circulated to stakeholders seeking their feedback in 2008, was finalized in January 2009[4].

           

            The main purpose of this paper is to document developments and concerns with regard to unions, unionism, employment pattern and industrial relations. It looks into the evolution of industrial relations system in Pakistan with focus on the legal framework dealing with formation of unions, collective bargaining, and the role of the Government and social partners. It also looks into the dispute settlement mechanism, collective bargaining and social dialogue. The study is organized in the following manner. This introductory section is followed by an analysis of employment and labor market indicators in Section-II. This is followed by a discussion on the legal framework dealing with working conditions and industrial relations in section-III. Workers’ and employers’ organizations are discussed in sections-IV and V respectively. Wages are analyzed in section-VI, while collective bargaining is covered in section-VII. Dispute settlement is presented in section-VIII. Tripartism and social dialogue are covered in section-IX. The paper ends in section-X by offering concluding remarks.

           

            The analysis in this paper is based on: 1) secondary data on the variables indicated in the preceding paragraph, 2) use of official records for gathering missing information, and 3) discussions held with “key informants” - employers, trade union leaders, and some concerned government officials and academics.  The labor market indicators used in this paper are based on six Labor Force Surveys (LFSs) conducted during the period 1996-97 to 2005-06. However, for some indicators, the LFS 2006-06 has been used.

           

            The analysis in this paper, nevertheless, has been constrained by data limitations, identified as under:

 

1.      Non-availability of consistent data on labor market indicators,

2.      Non-comparable data e.g. of population census and LFSs using different definitions and reference period for determining labor market participation,

3.      Data on employment, wages and labor cost in the manufacturing,

4.      Manufacturing sector employment – small, medium and large scale - by type (regular, part-time, casual, etc),

5.      Number of unions, federations and membership,

6.      Data on collective bargaining agreements – nature, coverage, etc., and

7.      Industrial actions and work stoppages.

 

II. Labor Market Indicators

 

Pakistan’s population, estimated at 155.37 million, is growing at the rate of 1.90 percent annually. The demographic profile of the population characterizing 30 percent of the population below 10 years of age and 12.9 percent in the age group of 10-14 years has led to a high dependency ratio. This phenomenon would increase the annual entrants into the labor market in the medium and long term.  The growth of labor force would increase not only due to the demographic composition of the population but also an increasing labor force participation rate (LFPR) and more so of the females.

 

Thus, the most important labor market challenge relates to the generation of decent and productive employment opportunities at least commensurate with additional entrants into the labor market; increasingly they would be educated and trained. Currently, the LFPR is estimated to be 32.2 percent. On this basis the labor force of Pakistan is estimated at 50.05 million during 2005-06, table-1.

 

The unemployment rate of 6.2 percent accounts for 3.1 million unemployed. The situation has been improving since 2001-02 when the rates peaked to 8.3 percent. The most significant labor market development relates to declining unemployment albeit slowly. This downward trend is being sustained, table -1.

 

Table 1

Labor Market Activity of the Population (10+)

Year	Population (M)	Activity Rate (%)	Labor Force (M)	Employed (M)	Unemployed (M)	Unemployment Rate (%)
1990-91	112.61	27.52	30.99	29.04	1.95	6.3
1991-92	115.54	27.64	31.94	30.07	1.87	5.9
1992-93	118.50	27.38	32.45	30.92	1.53	4.7
1993-94	121.48	27.40	33.29	31.68	1.61	4.8
1994-95	124.49	26.99	33.60	31.80	1.80	5.4
1995-96	127.51	27.00	34.43	32.58	1.85	5.4
1996-97	130.56	28.22	36.84	34.59	2.25	6.1
1997-98	133.48	28.92	38.64	36.36	2.28	5.9
1998-99	136.69	28.91	39.52	37.19	2.33	5.9
1999-00	139.76	28.51	39.84	36.72	3.12	7.8
2000-01	142.86	28.48	40.69	37.50	3.19	7.8
2001-02	146.75	28.48	40.69	37.50	3.19	7.8
2002-03	149.65	29.61	44.12	40.47	3.65	8.3
2003-04	152.53	30.41	43.74	40.38	3.36	7.7
2005-06	155.37	32.21	50.08	46.94	3.10	6.2

Source: Pakistan Economics Survey 2005-06

 

II.1      Employment Situation

The estimates show that of the 46.94 million employed in 2005-06 as high as 37.81 million were males while 9.13 million were females, table-2. The employment generation has been higher in rural than urban areas; it is attributed to an expanding rural economy mainly due to the focus of the Government on agriculture and livestock, in particular dairy and milk production. A number of schemes under public sector development programs (PSDPs) initiated in rural areas during 2003-2007 also contributed to job growth. During this period, a robust growth in industry and services sector, mainly in urban areas and coinciding with increasing consumer spending, has led to a rise in employment. It is worth mentioning that the low employment growth during 1990s was the result of low GDP growth and smaller PSDP allocations to the social sector.

 

Table-2

Distribution of Employed by Region

 

Year	Pakistan			Urban			Rural
	Both	Male	Female	Both	Male	Female	Both	Male	Female
1996-97	34.13	29.53	4.58	10.31	9.45	0.85	23.87	20.12	3.74
1997-98	35.94	30.93	5.00	10.78	9.99	0.78	25.15	20.92	4.22
1999-00	36.3	31.21	5.08	10.07	9.19	0.87	26.23	21.98	4.24
2001-02	38.9	33.19	5.69	12.2	11.00	1.22	26.7	22.19	4.47
2003-04	42.00	34.69	7.06	13.1	11.76	1.35	28.6	22.93	5.71
2005-06	46.94	37.81	9.13	14.46	12.80	1.66	32.48	25.01	7.47

 

 

The agricultural sector continues to be the dominant employer of the workforce. Shift in cropping pattern, better input and output prices as well as cultural practices and water availability still carry considerable employment and productivity potential. The share of employment in manufacturing is small -13.7 percent. However, the focus also on consumer appliances, auto, engineering, chemicals and ICT had a positive impact on industrial activities. Indeed, these industries also demonstrate greater backward and forward linkages, thus carrying a potential for larger employment generation. The wholesale and retail trade is playing a significant role in employment creation. It accounted for 14.3 percent of employment in 2005-06. Social, community and personal services as well as construction are the other important sectors providing employment, table-3.

 

Table-3

Percentage Distribution of Employed Persons by Major Industry

 

 

Year	Agri	Mining, Quar	Manuf	Construction	Elec, Gas	Trade	Commu	Finan. Insit	Social	Not Defined
1996-97	44.2	0.1	11.1	6.8	1.0	14.6	5.7	1.0	15.6	0.04
1997-98	47.3	0.2	10.0	6.3	0.7	13.9	5.5	0.9	15.4	0.1
1999-00	48.4	0.1	11.5	5.8	0.7	13.5	5.0	0.8	14.2	-
2001-02	42.1	0.1	13.8	6.1	0.8	14.8	5.9	0.9	15.5	-
2003-04	43.1	0.1	13.7	5.8	0.7	14.8	5.7	1.1	15.0	0.1
2005-06	44.1	0.1	13.7	6.2	0.7	14.3	5.7	1.1	14.1	-

 

Structural transformations are taking place in employment status. The self-employment is declining, unpaid family helpers (UPFHs) are rising. Is the rise in UPFHs an indicator of policy outcome - increasing number of households finding their economic activities rising, hence demanding more UPFHs? There is also a decline observed in the “employer” category, table-4. As high as 72.9 percent of the non-agricultural workforce are engaged in the informal sector activities, table-5.

 

Table- 4

Regional Distribution of Employed Persons by Employment Status

 

 

Year	Employer			Self-employed			Unpaid family Helper			Employees
	Pakistan	Urban	Rural	Pakistan	Urban	Rural	Pakistan	Urban	Rural	Pakistan	Urban	Rural
1996-97	1.1	2.6	0.4	42.2	33.1	46.1	20.3	9.3	25.1	36.4	55.0	28.4
1997-98	0.9	2.3	0.3	41.5	33.4	45.0	22.4	9.3	28.0	35.3	55.1	26.7
1999-00	0.8	2.3	0.2	42.2	33.9	45.6	21.4	10.0	26.1	35.6	53.9	28.1
2001-02	0.8	1.9	0.3	38.5	30.5	42.2	20.8	9.7	25.9	39.9	57.9	31.6
2003-04	0.9	2.3	0.2	37.1	31.6	39.6	24.1	10.8	30.3	37.9	55.3	29.9
2005-06	0.9	2.1	0.36	34.9	31.3	36.6	27.0	11.2	33.9	37.3	55.4	29.2

 

 

Table-5

Percentage Distribution of Non-Agriculture Workers in the Informal Sector

 

Years	Pakistan			Urban			Rural
	Total	Male	Female	Total	Male	Female	Total	Male	Female
1997-1998	67.8	68.1	64.5	63.3	64.0	53.1	73.1	73.0	74.7
1999-2000	65.8	65.8	65.7	63.8	64.1	60.7	68.0	67.6	73.1
2001-2002	64.6	64.7	63.0	61.1	61.1	60.7	68.3	68.5	65.7
2003-2004	70.0	70.4	65.7	67.2	67.8	61.6	72.9	73.3	69.9
2005-2006	72.9	74.2	25.2	71.0	71.2	69.1	74.8	74.3	79.4

 

 

 

Despite the growing size, the informal sector continues to be largely “invisible” and “neglected”. Sufficient information is lacking concerning employment pattern, the nature and extent of its activities and characteristics of its participants which leads to an absence of information on region-, trade- and activity-specific employment potential.

 

This type of employment pattern, nevertheless, has implications for industrial relations. Whereas, the existing labor laws limit their application to the “formal sector” i.e. those establishments that employ more than ten workers, organizing of the workforce engaged in the agriculture and informal sector is a very serious challenge. Even official mechanism of enforcement and labor inspection currently are incapable to respond to this huge segment of the employed.

 

 

II.2      New Forms of Employment and Areas of Concerns

 

The transformation of economic, social and political environment of the economy has brought changes in the labor and management relationship. Traditionally, labor relations had revolved around unions, management and their collective bargaining rela­tionship, focusing on economic aspects, i.e. growth, productivity, quality and remuneration for work. The difference in the per­ceptions of employers and workers led to the evolution of the indus­trial relations system - comprising legislation and administrative pro­cedures and the institutions of col­lective bargaining - to strike a bal­ance of interests between the two extremely unequal parties. Labor relations systems, ear­lier narrowly defined as workers management relations in local and national context, have undergone a sea change in the wake of and the emerging global economy. Market forces and global politics now impact upon the world of work much more than the mediation of social actors, legal norms or state interventions.

 

In the Pakistani context, when “employees category” of employed is looked in terms of employment category – regular, casual, piece rate and apprentice - a rather discomforting situation is observed, table-6. Only 56 percent of employees have a “regular” work. The employees having casual work are 27 percent and those engaged on piece rate work are 16 percent. Almost half of the jobs are either casual or piece rate in the manufacturing sector. While electricity has highest regular employees – 97.5 percent, it is lowest for construction – 6.5 percent. The percent of regular employees in finance, services, trade, transport, agriculture and mining respectively are 89, 86, 70, 60, 26 and 21. About a-third of employees in agriculture, manufacturing and mining are on piece rate. The proportion of apprentices is insignificant and maximum being 2 percent of employees in manufacturing.  Quality of employment is thus an area of concern even for “employees” category.  These broad conclusions and developments in the labor market, however, would need detailed analysis - by gender, areas, education and literacy for example - of data set as available from the micro files of the LFSs of different years.

 

Table-6

The Vulnerable Nature of Employment of “Employees”

(%)

	Regular	Casual	Piece rate	Apprentice
Agriculture	26	42	31	1
Mining	21	49	30	0
Manufacturing	51	16	31	2
Electricity	97.5	2	0.5	0
Construction	6.5	76	17.5	0
Trade	70	19	10	1
Transport	60	28	11	1
Finance	89	7	3	1
Services	86	8	5	1
Total employment	56	27	16	1

 Source: LFS 2005-06

Note: Based on the calculations made from the micro files of LFS

Lesser remunerative and low productive work currently affects a significant proportion of the employed. Poor working conditions in significant workplaces are also not uncommon (Ghayur 2007). The changing work patterns and new forms of employment are more in the direction of making employed more vulnerable.

The most significant change in the world of work that has affected industrial relations is the changing employment patterns. As is observed from table-6 above, long-term employment relations - or regular type employment - are being replaced with casual and piece-rate. The increasing contract employment trend as well as home-based workers has added yet another dimension to the changing employment pattern. The workforce that once used to be organized under more or less in large industrial units in well-defined work places now mostly stands unorganized, fragmented and dis­persed in various smaller locations and unconnected spaces. This transformation has led to increasing inequality of income, rising poverty and insecurity.

 

III.       Legal Framework and Industrial Relations

 

         Pakistan Constitution has provisions concerning economic and social well being of the people and for the promotion of social justice. Fundamental rights, amongst others, in respect of the security of life or liberty, prohibition of slavery and forced labor and right to form associations or unions have been enshrined in the Constitution and any law, custom or usage having the force of law inconsistent with the fundamental rights, is void and the state is prohibited to make any law which take away or abridge the fundamental rights. The Constitution thus supports the progress of labor legislation for the benefit of the working people.

 

Under Articles 141 and 142 of the Constitution, both the National Parliament and the Provincial Assemblies can make laws in respect of any matter contained in Concurrent Legislative List[5]. Even the provisions for legislation in the field of labor as contained in the Constitution 1973 were almost similar as outlined in Constitutions of 1956 and 1962.

 

Most of the rights and privileges secured under labor laws to the working people of Pakistan are enshrined in Chapter IV of the Constitution which stipulates the fundamental rights of the citizens. Article 9 stipulates that no person shall be deprived of life or liberty, save in accordance with the law. Article 11 prohibits slavery and all forms of forced labor and traffic in human beings. Article 17 concerns freedom of association and provides that “every citizen shall have the right to form associations or unions, subject to any reasonable restrictions imposed by law in the interest of morality or public order”. All laws inconsistent with fundamental rights are void. This is provided in Article 8, sub-section (1) and (2) of the Constitution.

 

Pakistan has also ratified all the Core Labor Standards (CLSs) of the ILO as well as international instruments on rights of the child and elimination of discrimination against women.

 

 

It is worth mentioning that Pakistan inherited important labor legislation that was formulated in pre-independence days. Important amongst them, indeed are those pertaining to the “industrial relations”, namely: ­ i) Industrial Dispute Act 1936, and ii) Trade Union Act 1926. No doubt, these laws were far more progressive as the workforce except police and military and employees in administration of state had the right to form and join trade union of their own choice as well as exercise the right of collective bargaining even to go on strike.

 

The Trade Unions were even allowed to maintain the funds for the political party of their own choice in order to gain political support on labor issues in the Parliament.

 

 

The Ministry of Labor and Manpower (MOLMP) is responsible for making labor laws in the country that it does through a consultative process. Existing labor laws – 74 in number and a number of them corresponding to the ILO Conventions ratified by the Government of Pakistan – can be broadly grouped in six major categories, namely: 1) industrial relations, 2) employment and service conditions, 3) occupational safety and health, 4) human resource development (HRD) and technical and vocational education training (TVET), 5) social safety nets/social security, and 6) wages and remunerations; many correspond to the ILO Conventions ratified by the Government of Pakistan. However, for the purpose of this paper, we only focus – briefly though – on laws governing industrial relations and employment and service conditions, table-7.

 

Table - 7

Major Labor Legislation in the Area of Industrial Relations,

 Employment and Service Conditions

 

S.No.	Classification of Labor Laws	Current Legislation	Corresponding to ILO Convention(s) Ratified by Pakistan by Year
1.	Industrial Relations	Industrial Relations Act 2008	Right of Association (Agriculture) Convention 1921 C11, Ratified in 1923 Freedom of Association & Protection of the Right to Organize Convention, 1948 C87, Ratified in 1951 Right to Organize & Collective Bargaining Convention, 1949 C98,  Ratified in 1952
2.	Employment and Service Conditions	·         The Factories Act, 1934   ·         The West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance, 1968   ·         The West Pakistan Shops and Establishments Ordinance 1969   ·         Children (Pledging of Labor) Act 1933,   ·         The Payment of Wages Act 1936 ·         The Employment (Record of Services) Act 1951   ·         Coal mines (Fixation of Rate of Wages) Ordinance 1960   ·         The Road Transport Workers Ordinance 1961   ·         The Minimum Wages Ordinance, 1961   ·         The Minimum Wages for Un-skilled Workers Ordinance 1969   ·         The Employees’ Cost of Living (Relief) Act 1973   ·         The Employment of Children Act 1991   ·         The Mines Act 1923	·         Hours of Work (Industry) Convention1919 - C1 - Ratified in 1921 ·         Night Work (Women) Convention 1919 - C4 - Ratified in 1921 ·         Persons (Industry) Convention 1919 - C6 - Ratified in 1921 ·         Weekly Rest (Commerce & Offices) Convention  1957 -C106 - Ratified in 1923 ·           Night Work (Women) Convention (Revised) 1934 - C41 - Ratified  in 1935 ·           Underground Work (Women) Convention 1935 -C45 -Ratified in 1938 ·           Minimum Age (Industry) Convention (Revised) 1937 - C59 - Ratified in 1955 ·           Night Work (Women) Convention (Revised) 1948 - C89 - Ratified in 1951 ·           Night Work of Young Persons (Industry) Convention (Revised)  1948 - C90 - Ratified in 1951 ·           Equal Remuneration Convention1951 - C100 - Ratified in 2001 ·           Discrimination (Employment & Occupation) Convention 1919 - C111 - Ratified in 1961 Forced Labor Convention  1930 - C29 - Ratified in 1957

 

 

III.1     Labor Policies in Pakistan: A Brief Overview

 

A new labor policy is under preparation as a follow up to the directives of the Prime Minister at the PTLC held in February 2009. When announced, it would be sixth labor policy. While, the first was announced in 1955, the last was announced in 2002. In the intermittent period, three policies were announced in 1959, 1969 and 1972.

III.1.i  Labor Policy 1955

Encouraging growth of genuine and healthy trade unions to promote collective bargaining and raising living standards of workers were laid down as the two policy objectives of the first labor policy. The policy stressed sound and healthy relationship between employer and employees as prerequisite for increased productivity and efficiency. A country with extremely poor base in the initial year of its existence, naturally led the Government to stress on industrial peace and harmony and speedy with justice settlement of disputes between employers and employees through legal procedures, such as: i) joint consultation, ii) mediation, iii) conciliation, and iv) arbitration – with awards and decisions enforced. For this purpose Government desired that genuine trade unionism be recognised.

The policy also took cognizant of the need that the trade unionism is neither exploited for political purposes nor the labor victimized for legitimate trade union activities. Furthermore, the policy also stressed preventing labor exploitation and increasingly promotes their welfare.  The policy stated that Government would endeavour in particular to: i) raise the standards of living and working conditions of workers and ensure them a reasonable return for their labor, ii) provide social security for all workers by means of social insurance or otherwise to the extent the economic conditions permit, iii) ensure that factories have proper standing orders and the system of works committees in the interest of efficiency and production is introduced, iv) assure that workers are properly fed, clothed and housed, better educated, given technical training and provided with adequate amenities, and v) encourage healthy trade unionism and collective bargaining.

 

III.1.ii   Labor Policy 1959

The ILO Conventions ratified by the Government were indicated as the basis for developing the new industrial relations policy of 1959. The policy also stressed growth of healthy trade unionism for a stable social structure, with industrial and social peace ensuring greater production and equitable distribution of wealth. Sound and healthy “employer and employee” relationship was indicated as prerequisite for increased productivity. The policy recognizing industrial peace as essential for economic progress discouraged agitation and tension in industrial and commercial undertaking and other fields of human endeavour. It stressed settlement of disputes between management and labor through legal means, such as: joint consultation, voluntary arbitration, conciliation, mediation and adjudication.

The policy stressed that stepping up of production is also linked with suitable measures adopted for providing social amenities to workers of all categories. Calculated to meet, as far as possible, their requirements of health, education, recreation, housing, wages and similar other needs of all categories of workers.

Some other important aspects covered by the policy were: i) stepping up of production,  ii) suitable measures for reducing unemployment, iii) continuation of non-fee employment agencies and a program of employment information, iv) proper employment of seamen inside and outside the country through regular employment, fair wages and social amenities, and v) private industries and organizations to also pool their resources in a co-operative manner to provide for social amenities; possible imposition of welfare taxes on commercial, industrial and other private establishments to raise adequate funds to organize welfare measures for employees.

As a follow up to the policy, new labor legislations enacted were related to: i) the Road Transport Workers Ordinance, 1961, ii) the Minimum Wages Ordinance, 1961, iii) the Apprenticeship Ordinance, 1962, iv) the Provincial  Employees' Social Security Ordinance, 1965, v) the Excise Duty on Minerals (Labor Welfare) Act, 1967, vi) the West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance, 1968, and vii) the Companies Profits (Workers' Participation) Act, 1968.

 

III.1.iii     Labor Policy 1969

 

The policy laid stress on creating environment in which both the employers and workers could work together to achieve greater productivity. It further attempted to allow the free exercise of freedom of association for all workers and to encourage the growth of trade unions. The policy introduced collective bargaining mechanism for settlement of industrial disputes and its extension to the public sector. It nevertheless prohibited strikes in the essential services. The policy also introduced fixation of minimum wages and also created workers’ welfare fund for construction of houses of workers.  Occupational health and safety of the workers was also stressed by the policy.

The policy led to the promulgation of the Industrial Relations Ordinance, 1969 (IRO 69) on 23 November, 1969 and the provision of Rs. 100 million for workers’ housing.

 

 

III.1.iv     Labor Policy 1972

The fourth labor policy was announced in 1972 by the Government led by Pakistan Peoples Party (PPP). The PPP was elected on socialist agenda with certainly a “pro-labor” manifesto. The policy had three important dimensions, namely: i) immediate increase in workers' real wages, ii) increased production, and iii) promotion of trade unionism, and amelioration of the workers' lot. It included twenty-two specific points as under:

1.      Workers’ participation in management of industry,

2.      Appointment of auditors by the CBA and to be paid by the employers  to audit company accounts in certain cease,

3.      Increase in workers' share in profits from 2.5% to 4% (and later to 5%) under Companies Profits (Workers’ Participation) Act, 1968,

4.      Nomination/election of “Shop Stewards” in each factory department to attend day to day workers’ problems,,

5.      Labor Court decisions in 20 days for individual cases,

6.      Settlement of “disputes” through Works Councils; the Councils to deal with all matters that can go before Labor Courts,

7.      Either workers or employers permitted to take matters to the Labor Courts,

8.      Curtailment of strike/lock out notice period from 21 to 14 days. Strike, however, linked with a prior secret ballot,

9.      Lower supervisory levels in banks included in the definition of “workman”,

10.  Statement of reasons for termination of services of a workers,

11.  Provision of  statutory bonus up to one month  wage/salary and linked with profits,

12.  Payment of Wages Act, 1936 and West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance, 1968 made applicable to all contractors,

13.  Providing funds for workers' housing through the Workers' Welfare Fund Ordinance, 1971 and representation to  workers ,

14.  Free education up to matriculation for one child per-worker by the employer,

15.  Workers' 2% social security scheme contribution dropped, employers' contribution raised from 4% to 6%,

16.  Introduction of old age pension for workers,

17.  Compulsory group insurance against death and injury for off-duty workers,

18.  Extension of social security to domestic servants,

19.  Revision of safety measures and workmen's compensation against death and injury laws,

20.  Introduction of group incentive scheme,

21.  Creating a quasi-judicial body – National Industrial Relations Commission (NIRC) - to promote genuine trade unionism, help in formation of unions and federations (industry-wise and at the national level) and to deal with victimization cases and unfair labor practices, and

22.  Eventual linking of wages to prices but no immediate increase in cash wages.

 

As a follow up to the policy, specific measures taken related to: i) amendments in the Industrial Relations Ordinance, 1969 and the West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance, 1968, ii) enactment of Workers' Children (Education) Ordinance, 1972, iii) the Employees Old-Age Benefits Act, 1976, and iv) the Employees Cost of Living (Relief) Act, 1973.

 

Furthermore, restrictions on trade union registration were removed. Thus, encouraging expansion in the number of trade unions.

 

III.1.v  Labor Policy 2002

 

The 2002 policy preceded tri-partite consultations as well as discussion in the PTLC in the same year. An important element of the policy was the support of the Government to bi- and tri-partite mechanism with regard to policy formulation, self regulation and peaceful resolution of disputes/conflicts. The workers’ and employers’ organizations, policy stressed, would be persuaded to evolve “codes of conduct” at the level of enterprise and industry which should lay emphasis on respect for reciprocal rights and obligations of both the parties and enhanced confidence in unions to play positive role in organisational performance. Furthermore, to render support to bi-partism, the policy enshrined that the “regulatory” authority of the Government to be exercised only in the event of the failure bi-lateralism mechanisms in dispute resolution.

 

The Policy set itself with the goal of progressive extension of the coverage of labor laws and welfare measures to the informal economy and un-organized sectors. The duplicity, complicated and even “out-dated” nature of labor laws was realized by the policy and to address this issue stressed consolidation/classification of labor laws. Existing labor laws, in this regard, to be consolidated, simplified and rationalized into six basic laws relating to: i) industrial relations, ii) conditions of employment, iii) payment of wages, iv) human resource development (HRD), v) occupational safety and health, and vi) labor welfare and social protection.

 

The Policy also set as goals: i) legislative changes to provide easy access to speedy justice, ii) promotion of employees social security and social insurance programs, iii) effecting improvements in the labor welfare institutions in the area of social security, old age benefits and workers’ welfare, iv) elimination of child and bonded labor, and v) elimination of gender discrimination and reinforcing gender equality for working women. With regard to gender equality, the policy further stressed in making workplaces conducive for women workers and “equal pay for work of equal value” promoted.

 

Some other salient features of the policy are as under:

·        Labor laws and the system of labor administration to be brought in conformity with International Labor Standards and the Constitution of Islamic Republic of Pakistan,

·        Institutions responsible for social protection, social insurance and labor welfare to be made autonomous and effective,

·        A system of merit scholarships for higher education for workers’ children to be put in place,

·        An inter-ministerial committee to be constituted to formulate a package of labor welfare measures for the agriculture sector workers, and

·        An inter-ministerial committee shall be formed to address the issues arising out of globalization.

 

 

 

III.2     Industrial Relations

 

Industrial relations in the work place are governed by the provisions as stipulated by the industrial ordinances/act as enacted, repealed and modified by the Governments from time to time. Trade unions in Pakistan generally function on plant-wide basis, with their membership contingent on the size of the industry/trade to which they belong. Once established, the trade unions and employers' associations have the right to draw up their constitutions and rules, to elect their representatives in full freedom, to organize their administration and activities and to formulate their programs.

The drawing up of a detailed constitution is a primary requirement before any application for registration of the union can be filed. Before issuing the certificate of registration, the constitution of the union is thoroughly examined by relevant authorities.

 

Democracy is ensured in the internal working of trade unions. Office bearers of the unions have to get elected by their own members through secret ballot every two years. In case there are more than one union in an establishment these unions are required to participate in referendum to determine the CBA union. Thus office bearers of a union are answerable to their own members during secret ballot as well as during referendum to other unions. The union that secures more than one third votes of the total number of eligible votes in an establishment gets the status of collective bargaining agent (CBA).

 

Trade union leadership consists of a number of office bearers. The apex body of the unions is the executive council/governing body headed by the president of the trade union. The other important office bearers include vice president, secretary, joint secretary, and treasurer. A council of representatives directly elected through votes also takes part in the consultative crucial decisions making process of the unions. The major decisions are also shared with the membership in their general meetings.

 

There is a strong mechanism of transparency and accountability in the working of unions. They have to seek the support of members through a secret ballot every third year to get the status of collective bargaining agent (CBA), their work and performance undergoes scrutiny not only by workers but also the other contesting unions.

 

 

Necessary legal support is provided by the industrial relations laws. The country has witnessed two Industrial Relations Ordinances, namely of 1969 and 2002, and an Industrial Relations Act of 2008 (IRA-08). The IRA-08, however, is an interim arrangement and its validity is up to April 2010; it will stand repealed if a revised version is not tabled in the parliament.

 

The IRA-08 as well as its predecessors IRO-02 and IRO-69 set out the rules and procedures for the internal working of the trade unions and employers' organizations on democratic lines so that they represent their members in proper manner. The IRO-69 defined the primary objective of formation of unions as to improve relations between employers and workers and negotiate better terms of employment for their members. The laws governing industrial relations make it mandatory for every union or federation of such trade unions to register with the Registrar of the provincial labor departments or with the National Industrial Relations Commission (NIRC) at the federal level. Basic purpose of the registration is to ensure proper adoption of procedure by unions in their operations and follow rules and regulations in their working.  This section makes a brief overview of these legislations.

 

III.2.i  Industrial Relations Ordinance, 1969

The promulgation of the Industrial Relations Ordinance, 1969 (IRO-69), as a matter of fact, is the first important step towards promotion of unionism in the country and protection of the rights of working women and men. Indeed, it also provided workers the “right to strike”. The Ordinance providing legal cover to the workers to organise and bargain collectively also laid down guidelines for dispute settlement procedure that included setting up of labor courts and, importantly, establishment of the National Industrial Relations Commission (NIRC).

 

            Salient features of the IRO-69, in addition to the right to form a union and association as well as collective bargaining, are mechanism with regard to dispute settlement and important steps in this regard are: a) National Industrial Relations Commission, b) works councils in every establishment employing fifty or more workers, c) shop stewards in establishments with fifty or more workers through nomination/election to act as a link between labour and management, d) labor appellate tribunals in provinces, as many tribunals consisting of one member as provincial governments may consider necessary, e) conciliation - Government to appoint conciliators on receipt of notice of dispute from either party (i.e. employer and workmen) for bringing about a settlement, f) arbitration – if conciliation failed, the conciliator to persuade parties to agree to offer the dispute to an arbitrator, g) labor courts - . The parties would make a joint application for appointment of arbitrator, and h) labor courts – any collective bargaining agent or employer may apply to the labour court for the enforcement of any right guaranteed or secured under any law or any award or settlement.

The IRO-69 specifies that an establishment having one union with not less than one third of the workmen as its members could function as collective bargaining agent (CBA). However, an establishment having more than one trade union, the Registrar would conduct secret ballot to determine the CBA among the trade unions having not less than one third of employees as their members. The CBA was entitled to undertake collective bargaining with employers, represent workmen in any proceedings and nominate representatives on board of trustees of any welfare institution, etc. The agent was also entitled to give notice of, and declare strike in accordance with the provisions of the Ordinance.

 

Whereas, the Ordinance aimed at amending and consolidating laws relating to formulation of trade relations, regulation of relations between workers and employers and avoidance and settlement of disputes between them, it nonetheless by-passed numerous places of work.  Its coverage was exempted to persons employed in: i) police or any of defence services, including institutions connected with defence, ii) administration of state other than those employed as workmen in Railways, Ports and Telegraph and Telephone Departments, iii) security staff of the national carrier - Pakistan International Airlines (PIA), iv) Pakistan Television and Pakistan Broadcasting Corporations, v) Pakistan Security Printing Corporation, vi) establishments maintained for treatment of sick, infirm, destitute or mentally unfit persons, vi) teachers, vii) workers in export processing ones (EPZs), viii) workers in agricultures, forestry and informal economy. Furthermore, the Essential Services (Maintenance) Act, 1952 restricted trade union activities in relation to collective bargaining and right to strike in many areas.

 

Some latter developments were in the direction of curtailment of the fundamental rights. The Civil Services Act, for example, amended whereby employees of government, semi government, autonomous bodies and public companies denied access to the NIRC and the Labor Courts[6]. Through amendments made in 1997 in the Banking Companies Ordinance 1962, restrictions imposed on exercise of trade union rights, such as: trade union officials if terminated by the management cannot remain office bearer/member of union and trade union activities during office hours had been restricted.

 

III.2.ii Industrial Relations Ordinance, 2002

            The IRO-69, notwithstanding its importance and providing a legislative framework for industrial relations, did contain areas of concerns as indicated in section III.2.i. The flaws in the IRO-09 were reviewed by Justice (Rtd.) Shafi-ur-Rehman Commission in 1999 and latter by the Tripartite Labor Conference held in 2001. Accordingly, on the basis of “review” and “recommendations”, draft of a new Industrial Relations Ordinance was prepared. The draft was presented at the meeting of the Standing Labor Committee (SLC) of the Ministry of Labor, Manpower and Overseas Pakistanis in October 2001. The SLC formed a two member sub-committee representing employers and workers[7]. The draft IRO was subsequently reviewed by the Workers Employers Bilateral Council of Pakistan (WEBCOP) and then submitted to the Ministry of Labor. Several tripartite meetings also convened to thrash out a “consensus” document. The Federal Cabinet while approving the draft nevertheless constituted a sub-committee of three ministers to review and suggest changes. A final version, incorporating changes suggested by the Cabinet Sub-Committee was promulgated as the new Industrial Relations Ordinance in October 2002 (IRO-02).

 

Changes/Differences in IRO-02 with its Predecessor

 

 The new IRO provided the right to organize and join union to those employed in supervisory capacity that was earlier excluded from the definition of “workman”. Only persons employed in managerial and administrative capacity were excluded from the definition of workman.

The Ordinance provided only one forum namely, Joint Works Council (JWC) for workers’ participation in the management in every establishment employing more than 50 persons instead of previously three participatory forums, namely, Works Council, Management Committee and Joint Management Board. The new JWC comprised of ten members; 40% from workers. The workers’ members in case of a CBA were to be from its office bearers; otherwise they will be elected by workers. The JWC was entrusted to deal with such matter as improvement in production/productivity, provision of minimum facilities for workers employed through contractors, promoting bilateral negotiations, safety and health, vocational training, facilitating harmonious working relations and provision of education to workers’ children. The JWC was also empowered to call for reasonable information about the working of the establishment.

 

The new Ordinance provided for the constitution of “Boards of Conciliators” on the request of the party raising the dispute, in case of disputes involving more than one establishment in a province or in the case of an industry at the national level or in the case of a dispute of national importance.

Whereas, the associations of workers and employers both were termed as “trade union” in the IRO-69, the new Ordinance termed association of employers as “Association” and that of workers as “Trade Union”.

The requirement of membership of workers for the registration of third trade union increased from one fifth to one fourth. Whereas, the registration of a trade union could be cancelled by the Registrar if, after holding such inquiry as he deemed fit, he found that such trade union had dissolved itself or has ceased to exist, in the new Ordinance new clauses were added. Hence,  in addition to the above, the registration would be cancelled if a trade union: a) has not been a contestant for collective bargaining agent, b) has not applied for determination of CBA, and c) has secured less than 15 % of polled votes during referendum for the determination of CBA.

The new Ordinance laid down additional conditions in securing trade union rights of workers and its officials. In addition to prohibiting the transfer and punishment of any officer of a trade union during the pendency of the union’s application for registration, the new Ordinance also prohibited the transfer, retrenchment, termination and removal from service of any worker who is an officer of a contesting trade union.

 

The new Ordinance provided that those who are convicted for criminal offences of heinous nature such as theft, physical assault, murder and attempt to commit murder, etc. would also be disqualified to become officers of the trade union. Earlier, it was limited to those committing the offence of embezzlement of the funds of a trade union.

 

            The employers' rights included the right to manage their businesses and use their resources, including human resources, efficiently and effectively, while their obligations include respect for the rights of workers to employment, wages, decent living and better quality of life. The rights of workers include the right to work, the right to wages and the right of association and collective bargaining.

Scope extended to many categories of workers in the establishments that were hitherto excluded. For example the categories of workers and establishments covered were: i) supervisors in a factory or establishment, ii) hospitals/dispensaries/clinics run on commercial basis, iii) installations or services not exclusively connected with Armed Forces, iv) workers engaged through a contractor, and v) definition of the term ‘establishment’ so defined that all the offices and branches of an organization wherever located were treated as one establishment and hence one CBA for the whole organization. Furthermore, all offices and branches of an organization, wherever located, have been treated as one establishment if they have common balance sheet and profit and loss accounts. This has resulted in certification of only one CBA instead of several CBAs in the same organization.

 

            The Ordinance empowered Labor Court to award compensation equal to basic pay plus house rent for 12 to 30 months period, in lieu of reinstatement of a worker involving termination of employment. It also provided for the appeal against the award or decision of the Labor Court to the High Court.

 

The new Ordinance eliminated the tier “Labor Appellate Tribunal”. It also withdrew the powers of the NIRC to grant interim relief in case of termination/dismissal as an unfair labor practice. Furthermore, the punishment of imprisonment for unfair labor practices, breach of settlement and all other offences on the part of employers was replaced by enhanced amount of fines.

 

            In order to promote responsible trade unionism and discourage mushroom growth of unions in the country, it obligatory upon the unions to: i) affiliate with a national level labor federation, ii) participate in referendum for determination of collective bargaining agent, iii) secure at least 15% of polled votes in a referendum, and election or re-election of office bearers of a union to be effected through secret ballot, and iv) labor federations should have at least 10 affiliated unions, of which at least one should be from each province.  The Registrar given powers to cancel registration of any second union which did not apply for secret ballot within two months of its registration or promulgation of this Ordinance. Furthermore, the tenure of the union certified to act as CBA increased from 2 years to 3 years.

 

III.2.iii     Industrial Relations Act, 2008

 

The industry and work place relations are now governed by the Industrial Relations Act 2008 (IRA-08). It has removed restrictions on union formation in the EOBI, WWF and Pakistan Mint. Through a presidential order - number 6 - the law banning trade unionism in the Pakistan International Airline (PIA) was also repealed. The Act also removed the obligation of a collective bargaining agent to affiliate to a national trade union federation/organization.

 

The IRA, however, withdrew the right to organize from workers of Pakistan Telecommunication Authority (PTAC).  It also allows for settlement that is made between a group of workers and an employer. It is seen as undermining the role played by the trade unions in collective bargaining.  

 

The definition of “settlement” in the IRA, it is important to point out, is silent on the “collective bargaining” as it reads as “means a settlement arrived at in the course of a conciliation proceedings, and includes an agreement between an employers and his workmen arrived at otherwise than in the course of conciliation proceedings, where such agreement is in writing, has been signed by both the parties thereto in such manner as may be prescribed and a copy thereof has been sent to the provincial government, the conciliator and such other person as may be prescribed”. The definition of employers does not cover “contractors” implying that contract workers would not fall under the purview of IRA-08.

 

Whereas, Section 25 (3) prescribes that the appointment of the Chairman and Members of the NIRC is determined by the Federal Government, Sections 25 (2) prescribes appointment of labor court presiding officers by the provincial governments. The IRO-02 has linked such appointments on the recommendations of the Chief Justice of Supreme Court and High Courts.

 

The development of the IRA did not follow a consultative process especially with the social partners. No wonder, both workers’ and employers’ organizations as well as WEBCOP have raised concerns on the process and also on the IRA itself.

 

 

 

The IRA-08, it is important to point out, is an interim arrangement and its validity extends only up to April 2010.  If it is not revised and presented to the parliament in the course of eighteen months up to April 2010, it will stand repealed.

 

Section 1 (3) of the IRA-08 stipulates that it shall apply to all persons employed in any establishment or industry, but shall not apply to any person employed:

 

1.      In the police or any of the defence services of Pakistan and any services exclusively connected with or incidental to armed forces of Pakistan including Ordinance Factory maintained by the Government,

2.      In the administration of state other than those employed as workman by the Railway and Pakistan Post,

3.      As member of the security staff of PIA or drawing wages in pay group not lower than group 5,

4.      In the security printing corporation of Pakistan or the security papers limited,

5.      In an institution or establishment for the treatment or care of sick, infirm, destitute or mentally unfit persons,

6.      As a member of watch and ward, security of fire service staff of an oil refinery, an airport or sea port or an establishment engaged in the production, transmission or distribution of natural gas or liquefied petroleum gas.

 

Furthermore, the Essential Services Ordinance on public sector workers also exists. This Act gives the public sector employees the right to form a union and collective bargaining but not the right to strike. The Government has the authority to ban their trade union activities at any time. The amendment made by the previous Government to the Banking Ordinance of 1986 also continues. With this amendment, now section 27B provides that no worker can be entitled to become a member or officer of the trade union, if he or she is retrenched from the service.

 

 

III.3     Punjab Industrial Policy 2003

 

         On 24^th June 2003, the provincial Government of Punjab (the largest province of the country) announced Punjab Industrial Policy, 2003 aimed at maximizing business opportunities. The aim of the policy is to remove ultimately all irritants to business and trade. As a first step, inspection of industrial units by labor inspectors has been abolished. The discretionary powers of social security authorities have been completely removed. In place of wage related contribution, slab based annual contribution has been introduced for establishments with 50 or less workers. The units paying this contribution are exempted from inspection for three years. Units employing 50 or more persons are required to file a simple declaration every month along with contribution. All such units have been exempted from retrospective penalties and inspection during first six months of the year.

 

         Education cess has been abolished and all schools run through this cess have been handed over to Punjab Education Department. The Punjab Government, under this policy is creating new industrial estates and upgrading the existing ones through newly created Punjab Industrial Estate Development and Management Company (PIEDMC); a government funded and private sector led company. The policy also stipulates establishing labor colonies with schools, social security hospitals and technical training institutes. 

 

III.4     Developments during 2003-2007

            The Federal Cabinet has agreed to certain amendments in the West Pakistan Shops and Establishment Ordinance, 1969, whereby the employers have been allowed to employ workers for 10 hours in place of 8 hours a day or for 60 hours in place of 48 hours a week. The amendment provides for overtime pay, but in view of widespread corruption, while workers would be asked to work for extra hours, there is hardly any likelihood that the workers would be paid any overtime pay. Similarly, women workers would be required to work up to 10 p.m. It is feared that this may lead to their abuse. The restriction of observing paid weekly holidays for Sunday or Friday has also been relaxed and the employers have been given the right to observe any day of the week as weekly holiday. It is, however, worth mentioning that in this backdrop of worrying development, two new policies i.e. Labor Protection Policy (LPP) and Labor Inspection Policy (LIP) have been approved by the Cabinet.  

 

III.4.i  Labor Protection Policy 2006

 

            The Labor Protection Policy (LPP) 2006, consistent with and emanating from the Labor Policy 2002, covers five main areas, namely: 1) basic rights, such as, right to join a trade union and bargain collectively, equal treatment and non-discrimination, and absence of forced labor and child labor, 2) working conditions including minimum wages and above minimum wage issues, allowances and benefits, hours of work, over time work, rest breaks, leave arrangements including annual leave, sick leave and special leave issues, and job security provisions, 3) working environment including protection against occupational health and safety hazards as well as illness, 4) social security including protection against the effects of economic and social hardship resulting from a reduction in earnings due to work accidents/illness, unemployment and retirement, and 5) living environment including improved housing, and protection against adverse living conditions with regard to health and hygiene, diet, sanitation, water supplies and other matters.

 

 

III.4.ii Labor Inspection Policy 2006

 

            The specific objectives of the Labor Inspection Policy (LIP) are: i) introduction of a range of innovative approaches to labor inspection that are flexible, transparent, fair, and impartial, ii) encouraging extension of labor protection services to persons engaged in informal economy activities, iii) promotion of effective labor inspection as a means of dispute prevention and conflict reduction within enterprises, iv) encouraging and supporting involvement of private sector in the provision of a range of inspection services, v) developing the capacity of labor inspectorates to assist in their transformation to modern, efficient, effective and respected institutions, and vi) developing capacity of workers, employers and their respective organizations to adjust to new approaches to labor inspection.

 

III.5     Escape from Labor Laws

Foreign direct investment (FDIs) is increasingly viewed in developing countries as addressing the “twin” i.e. industrial development accompanying employment generation. Naturally, Pakistan also laid increasing emphasis on attracting and retaining FDIs. Pakistan adopted a number of incentives to attract foreign investment. Besides removing restrictions on investment in most of the sectors, Export Processing Zones (EPZs) and Special Industrial Zones (SIZs) were established in different parts of the country where labor laws related with industrial relations are not applicable.[8] 

Employers in the EPZs and SIZs are given a number of other concessions, especially in hiring and firing of workers and setting the terms of employment. These incentives to potential investors largely have taken away the right to organize and collectively bargain from workers.

            Many employers adopt different strategies to avoid the compliance of labor laws. Recourse to breaking up factories into small units, firing workers and keeping number of reported workers to minimum is not uncommon. The globalization wave has taken away many rights from the working class. The structural adjustment policies and process of privatization and deregulation being pursued since early 1990s has led into greater labor market flexibility. No wonder, the process is linked with increased vulnerability of the workers in particular those in the industrial undertakings including banking and insurance. Employers and investors are enabled to opt for contract employment, piece rate work and temporary workers.

IV.     Workers' Organizations

 

 

The information on trade union and related indicators in Pakistan was earlier compiled and published by the MOLMP. The “Pakistan Labor Gazette”, published earlier on rather regular basis has not seen its new edition/volume since June 2002 providing information until 2001. The Gazette has been providing data and analysis on: number of trade unions and CBAs, their membership, number of strikes, work stoppages, working days lost, number of disputes registered in the courts, etc. Sector-wise or occupation-wise information on union membership, division of membership in public and private sector, participation of women and youth in the union activities and the unionization rate in the informal sector remained conspicuous with their absence. Indeed, these are limitations in understanding the nature and dynamics of union movement in Pakistan.

 

At the time of the creation of Pakistan, there were two organizations of workers i.e. the communist All Indian Trade Union Congress (AITUC) and the reformist Indian Federation of Labor (IFL). After independence, these were reconstituted as the Pakistan Trade Union Federation (PTUF) and the Pakistan Labor Federation which after some time emerged as All Pakistan Federation of Labor (APFOL). There were only 115,000 union members: PTUF with 20,000 members in 38 affiliated unions in 1948, concentrated in the railways and APFOL centered around many other sectors, particularly, the port workers, with 95,000 workers in 49 unions in 1949.

 

The PTUF was close to the Communist Party and maintained relations with the World Federation of Trade Unions (WFTU). When the Communist Party was banned in 1954, the PTUF became dormant for time being but re-emerged in 1970. The APFOL took advantage of the situation and created the All Pakistan Confederation of Labor (APCOL) with two wings federation i.e. East Pakistan Federation of Labor and West Pakistan Federation of Labor. The APCOL with 209 affiliates and 393,000 members joined the ICFTU in 1951. By the mid 1950s, APCOL was recognized as the sole representative trade union by the Government. The Martial law of 1958-61 ended most of the trade union activities in the country and the Government initiated free market capitalism. The APCOL started disintegrating at this stage. In 1962, dissatisfied APCOL affiliates, notably the Petroleum Workers’ Federation and the Cigarette Labor Union, broke with the Confederation to form the Pakistan National Federation of Trade Unions (PNFTU).

 

Further splits in APCOL led to the loss of ICFTU affiliation. In the meantime PNFTU applied and joined ICFTU in November 1964. APCOL’s fragments claimed the name West Pakistan Federation of Labor. One faction finally changed its name to the All Pakistan Federation of Trade Unions (APFTU) and affiliated with the ICFTU in 1974. The third ICFTU affiliate emerged with its earlier name as All Pakistan Federation of Labor (APFOL). The Pakistan Federation of Labor, created in 1960, became the National Labor Federation (NLF) in 1964 and introduced trade unionism based on Islamic themes.

 

            The victory of Zulfikar Ali Bhutto’s Pakistan Peoples Party (PPP) in 1972 preceded major labor unrest in the country. While, the nationalization of dozens of private factories by the Bhutto regime opened the role for trade unions through self-management committees established at the plant level, the environment also resulted into extensive fragmentation of trade unions. No wonder, the multiplicity of trade unions in 1975 reduced the average membership to all times low i.e. 85 members per union! The Peoples Party also created “Peoples Labor Bureau”. By 1977, trade union membership reached a record of one million.

 

Presently, the merged organization – Pakistan Workers Federation – of the three ICFTU affiliates is the largest national center claiming close to a million memberships. The other significant national centers are: Mutahiddah Labor Federation (MLF) and the National Labor Federation (NLF)[9].  The APTUC also has close to 100,000 memberships.

 

The others, which are not really the national centers covering the entire country but still have membership mainly in one province, includes: All Pakistan Trade Union Organization (APTUO), All Pakistan Trade Union Federation (APTUF), National Trade Union Federation (NTUF) and Pakistan Trade Union Federation (PTUF). Except NLF and APTUC, the other federations are part of a lose umbrella organization - Pakistan workers’ Confederation (PWC).    

 

IV.1     Trade Unions Membership

           

            The information on trade union and related indicators in Pakistan was earlier compiled and published by the MOLMP. The “Pakistan Labor Gazette”, published earlier on rather regular basis has not seen its new edition/volume since June 2002 providing information until 2001. The Gazette has been providing data and analysis on: number of trade unions and CBAs, their membership, number of strikes, work stoppages, working days lost, number of disputes registered in the courts, etc. Sector-wise or occupation-wise information on union membership, division of membership in public and private sector, participation of women and youth in the union activities and the unionization rate in the informal sector remained conspicuous with their absence. Indeed, these are limitations in understanding the nature and dynamics of union movement in Pakistan.

 

            The union membership in 1951 was 393,137 with 209 registered trade unions with an average membership of 1,881. Around 70 percent of the workforce at the same period was employed in agriculture and the employment size of the industrial sector was negligible. The union membership in 2001 went up to 1,040,303 affiliating to 7,204 registered trade unions. The average membership, however, declined to 144 which is a 13 times decline in the membership when compared to the average membership in 1951, figure-1. During this period significant change took place in the industrial structure and in year 2001, the share of agriculture in the total employment dropped to 43 percent and that of manufacturing increased to almost 14 percent. The services sector assumed importance by providing employment to more than 40 percent of the workforce in this period.

Figure-1

 Unions and Membership

           

 

            Some interesting points to note about the union membership over different periods are as under:

 

1.      While there occurred more than threefold increase in the number of registered unions during 1951-60, it came along with a drop of 11 percent in the membership - the average membership per union dropped to 495 during that period,

 

2.      During 1961-70, number of registered unions rose approximately by 3.5 times but the average membership per union dropped to 292,

 

3.      The period from 1971-80 saw the golden time for trade unions because the registered number of trade unions reached the peak in 1976 with 8,611 but the union membership could only reach 1,050,788 in 1977. Thus, the average membership of the unions during this decade further declined to 133 members in 1980,

 

4.      The first five years of the 1980s saw a decline in the number of trade unions but the second half of 1980s saw a gradual increase. The number of registered trade unions increased by 113 percent, while union membership rose by 128 percent. The average membership per union only marginally improved i.e. it increased to 135 in 1990 from 133 in 1980, and

 

5.      The average union membership improved further, albeit small, during 1990s and it stood at 144 in 2001.

 

            Many unions operate at a plant or in an establishment but at the cost of absence of any representation of workers organizations in a large number of establishments. This multiplicity of the unions can be gauged by a mere look at table-8. Some important observations of concern are:

·        While, number of unions is over 7,200, the CBAs are only 1,905 i.e. 26 percent of these registered unions,

·        The highest percentage of registered unions with CBAs are in the province of Balochistan - 38 percent - and lowest in case of Sindh - 22 percent, and

·        This percentage for the provinces of the Punjab and NWFP is respectively 31 percent and 29 percent.

           

            It is not uncommon in Pakistan, that once a trade union wins the CBA status, a majority of workers is found joining this winning union.

 

Table - 8

Number of Registered Unions and Collective Bargaining Agreements

With Membership in 2001 by Provinces

Province	Registered Unions		Collective Bargaining Agent
	Number	Members	Number	Members
Punjab	2,142	407,546	674	140,921
Sindh	4,266	494,417	981	279,857
NWFP	598	80,840	174	38,404
Baluchistan	198	28,751	76	19,516
Total	7,204	1,040,303	1,905	478,698
Source: Labor Gazette

IV.2     Trade Union National and Industrial Federations

 

The data availability is a major constraint on proper understanding of unions, unionization and their representation in the national and sectoral/industrial federations in Pakistan. Many national federations are found to be having two list of numbers of affiliated unions and membership; one declared by themselves and the other submitted by them and registered with the National Industrial Relations Commission (NIRC). Further, many neither provide accurate information to the NIRC nor update on regular basis, tables 9 & 10.

 

It is important to stress here that any data on unions, national and industrial federations, and their affiliated unions – largely on lower side – needs to be used with “caution”.

 

The PWF, largest national federation on the basis of merger of three national centers in September 2005, has also not be able to provide to the NIRC the accurate picture of its membership and affiliated unions. While, at the time of merger “Congress”, it declared a membership of 880,192 with 419 affiliated unions, the NIRC, on the basis of information provided by PWF, has its membership as 548,292 with 175 affiliated unions. 

 

The situation with regard to other national federations in table-9 indicating lesser number of affiliated unions and lower membership - necessitating a caution in interpreting the available information as well highlighting the need for a proper data base – is also similar to the PWF in respect of difference in the membership and unions as “declared” and “registered” with the NIRC.

 

Information on some national federations together with their affiliated unions and year of registration is again pointer of paucity of data as well as no significant effort on the part of the concerned federation or even the NIRC for an update. The situation nevertheless points out very clearly that multiplicity is not confined to unions alone; it is equally contributed by the national federations. This divide is not fully explained on the political, ethnic and even religious grounds; personal rivalries do account for a significant factor as well.

 

 

 Table - 9

National Federations with Membership Declared and Registered with

With National Industrial Relations Commission

.	Name of  Federation	No. of  Latest Declared & Verified Membership and Affiliated Unions of the Federations		No. of Affiliated Unions and Registered Membership with National Industrial Relations Commission
		No. of Unions	Membership	No. of Unions	Membership
11.	Pakistan Workers Federation (PWF)	419	880,192	175	548,292
2.	Muthidda Labor Federation (MLF)	140	41,480	114	26,815
3.	National Labor Federation (NLF)	103	40,311	69	25,780
4.	National Trade Union Federation (NTUF)	86	46,983	41	10,521
5.	Pakistan National Textile, Leather, Garments and General Workers Federation (PNTLGWF)	47	12,520	39	10,333

Source: ILO (2008)

 

Table -10

Some other National Federations with Affiliated Unions and Membership

	Name of Federation	Year of Registration	Affiliated Unions	Membership
1.	Quaid-e-Azam Labor Federation of Pakistan (QLF)	2003	12	9,179
2.	All Pakistan Trade Union Federation (APTUF)	2004	10	9,032
3.	Watan Dost Mazdoor  Federation (WDMF)	2003	22	6,686
4.	All Pakistan Federation of United Trade Unions (APFUTU)	1992	9	5,647
5.	Pakistan Trade Union Federation (PTUF)	2004	13	5,466
6.	United Labor Federation (ULF)	1997	19	4,742
7.	All Pakistan Trade Union Congress (APTUC)[10]	1982	10	1,742

Source: ILO (2008)

 

 

 

            The paucity and accuracy of information affecting adequate understanding of sectoral/industrial federations notwithstanding, the “constant” in the labor movement i.e. “multiplicity” is faithfully carried forward even here as well, table 11. The information on 21 such federations do point that a number of sectoral federations exist even for an industry. 

 

            Despite such a sorry state of affairs, the redeeming feature nevertheless is the presence of labor movement across industry – manufacturing, services and even in local government/civic bodies as well as informal sector. 

 

Table - 11

Industrial/Sectoral Federations with

Affiliated Unions and Membership

	Name of Federation	No. of Affiliated Union	Total Membership
1.	Pakistan Federation of Building & Wood Workers (PFBWW), Rawalpindi	11	13,759
2.	Pakistan Oil, Gas & Mineral Workers Federation, Islamabad	10	8,792
3.	All Pakistan Local Government Workers Federation, Lahore	13	7,054
4.	Pakistan Sugar Mills Workers Federation, Hyderabad	14	6,795
5.	HBL Employees Federation, Karachi	41	5,371
6.	Cement Union Federation of Pakistan, Thatta	10	3,184
7.	Pakistan Construction Federation, Karachi	03	3,000
8.	Federation of Trade Union of Fauji Foundation, Karachi	10	2,546
9.	Pakistan Mines & Industrial Trade Union Federation, Hub Chowki Lasbella	21	2,338
10.	State Life Insurance Employees  Federation of Pakistan, Karachi	09	2,145
11.	Pakistan Mines Workers Federation, Quetta	06	1,541
12.	Ittehad Labour Federation Carpet Industries, Lahore	02	1,368
13.	Uni Lever Employees Federation of Pakistan, Karachi	06	1,217
14.	National Federation of Food, Beverage and Tobacco Workers, Karachi	07	1,205
15.	Pakistan Hotel, Restaurant,  Club, Tourism, Catering and Allied Workers Federation,  Karachi	07	1,139
16.	All Pakistan PMDC Employees Workers & Mines Federation, Islamabad	06	1,108
17.	Employees Federation of CDA, Islamabad	02	978
18.	National Federation of Grindlays Bank Employees Unions, Grindlays Bank Staff Union, Lahore	06	863
19.	ABL Officers/Executive Federation of Pakistan, Rawalpindi	07	502
20.	Standard Chartered Bank Employees Federation, Karachi	03	279
21.                                                 21	Pakistan Central Mines Labour Federation, (PCMLF) Quetta	04	199

Source: ILO (2008)

 

V.      Employers' Organizations            

 

 

The employers’ community in manufacturing, banking, finance, insurance, other services including trade and commerce is well organized and actively involved in protecting their business interests not only through umbrella organizations - such as: Federation of Chamber of Commerce and Industries (FPCC&I) and Employers Federation of Pakistan (EFP) but sectoral/industry-specific organizations as well – such as: All Pakistan Textiles Manufacturers Association (APTMA), Pakistan Carpets Manufacturers and Exporters Association (PCMEA), etc.

 

The overall business and trade related issues are taken by the FPCC&I; it has Chambers in major cities. In addition, sector-specific trade bodies also look after their interest. The matters related to the labor-management relations, however, are taken up by the EFP; the EFP is also represented at the ILO.

 

In 1947, after independence, the Pakistani employers established EFP in Karachi. The affairs of the Federation are being managed by the president and 20 members managing committee which is elected biennially. The Managing Committee, a policy making body, is assisted by the specialized sub-committees. The functions of these sub-committees are to guide the Managing Committee on various matters, which are pertinent to the interest of employers and the working of the Federation, etc. Each Sub-Committee is chaired by a specialist on the subject who conducts meetings regularly and advises the Managing Committee accordingly. The EFP is also a member of the International Organization of Employers (IOE).

 

The membership of the EFP is open to industrial and commercial establishment employing 20 or more employees as well as to the registered trade bodies. Currently, the EFP membership comprises of 537 industrial and commercial establishments both large and small, and 14 trade bodies. These trade bodies have membership of 36,685 units, table 12.

 

Table -12

 

Employers Federation of Pakistan Affiliated Trade Bodies

 

S,No	Name of Trade Body
1	All Pakistan Textile Mills Association
2	Karachi Chamber of Commerce & Industry
3	Filament Yarn Manufacturers Association
4	Korangi Association of Trade & Industry
5	Lahore Chamber of Commerce & Industry
6	Overseas Investors Chamber of Commerce & Industry
7	Pakistan Cotton Fashion Apparel Manufacturers & Exporters Association
8	Pakistan Sugar Mills Association
9	Pakistan Knitwear & Sweater Exporters Association
10	Pakistan Hotel Association
11	Sialkot Chamber of Commerce & Industry
12	Pakistan Jute Mills Association
13	S.I.T.E. Association of Industry
14	Pakistan Hotel Association
Total Membership	36,685

 

The EFP, in order to contribute development of market-based skills, has established in collaboration with the Government of Pakistan Skills Development Councils in Federal and Provincial capitals.

 

It also carries out research, publishes bi-monthly “Industrial Relations Journal” and organizes regularly workshops, conferences, seminars and training courses to promote cooperation, harmony and mutual interests of employers and workers with the objective of disseminating information and knowledge about human resource development and industrial relations affecting employers.

 

The EFP has collaboration with the ILO, International Organization of Employers (IOE), Confederation of Asia Pacific Employers (CAPE) and Nikkerian International Cooperation Center (NICC), Japan.

 

VI.     Wages

 

One of the limitations for the labor market analysis is the availability of consistent data on labor market indicators. The information on different dimensions of the economically active population is available in the Labor Force Surveys (LFSs) and population censuses but these are not comparable as both are based on different definitions/reference period. Census of Manufacturing Industries (CMI), another source also containing labor market information, used to provide data on employment, wages and labor cost in the manufacturing sector but that has been either discontinued or not updated since 1996-97. Due to this handicap, general wage trends are difficult to calculate. There is, however, segmented information available which can throw some light on the wage trends and income inequality. The absence of regular and quality data confine us to work on the available data with care.        

 

VI.1     Trend in Real Wages

 

Consistent data on wages is available only for the construction workers. Whereas the Federal Bureau of Statistics (FBS) used to publish data on the agriculture workers, no such data are collected by them any longer. The Year Book published by the FBS reports data on industrial wages and it shows wide swings in the wage rates because of the variations in the coverage of industries every year which renders the data useless. The data derived from the Census of Manufacturing Industries (CMI) is not very reliable and in any case it is not available for recent years. The LFS also collects data on wage rates. The LFS shows that the real wage rates over the two years period, i.e. 2003-04 to 2005-06 has increased by 10.5 percent. However, it is not very clear how the wage rates of different employees have been aggregated. Therefore, the estimates of real wage rates of construction workers classified by unskilled workers, mason, and carpenters may be relatively more reliable.

 

We note a gradual increase in the nominal wages of all construction workers since 1993. This increase, however, is more pronounced in the latest three years. During these years, unskilled workers experienced about 25 percent annual increase while masons and carpenters experienced 13-17 percent increase. The real wages show an increasing trend till 1999 for unskilled workers, after that a decline is noted up till 2003. The wages again start increasing and reach at 169 in 2006 which are now at the highest level. Those of masons, the real wages show slight movements around Rs 240 up till 1998 then an increase of 10 rupees and after that a declining trend till 2003 when these wages reached  Rs 231, the lowest level. The wages increased thereafter rather more rapidly and reached Rs 289. Similarly, the wages of carpenters also show an irregular trend until 1999 and a declining trend afterwards when wages reached at the lowest level of Rs 231 in 2003. An increasing trend is being witnessed for the carpenters, table 13.

 

Wages of unskilled workers, masons and carpenters over 2002-04 show increases of 11.1, 6.7 and 4.8 percent respectively. This confirms the increase in wage rates reported in the Survey but it is lower than that reported in the Labor Force Survey. 

 

Table-13

Daily Nominal and Real Wage Rates of the Construction Workers

(Pak Rupees)

Years	Construction Workers
	Unskilled		Mason		Carpenter
	Nominal Wage	Real Wage	Nominal Wage	Real Wage	Nominal Wage	Real Wage
1993	71	122	148	255	150	259
1994	76	116	158	241	159	243
1995	88	121	178	245	180	248
1996	100	124	196	242	194	233
1997	109	124	213	243	211	241
1998	117	126	225	244	225	244
1999	125	131	245	255	245	255
2000	124	124	245	245	245	245
2001	126	122	251	242	251	242
2002	130	122	252	236	252	236
2003	132	118	258	231	258	231
2004	152	125	306	251	293	240
2005	190	145	349	266	331	252
2006	239	169	408	289	383	271

 

The nominal wages for agriculture workers, available till 2004-05, show a consistent increase over a period of 15 years. Whereas real wages have been fluctuating between Rs 80 to 90 over the 15 years period, the wage level in 2004-05 reaches the level of 1990-91 i.e. no change is observed when compared these two years only, table 14.

 

Table - 14

Trends in Daily Agricultural Wages

Year	Nominal Wage	Real Wage
1990-91	36	83
1991-92	42	89
1992-93	42	81
1993-94	53	91
1994-95	56	86
1995-96	63	87
1996-97	72	89
1997-98	70	80
1998-99	80	86
1999-00	85	88
2000-01	90	90
2001-02	90	87
2002-03	95	89
2003-04	100	90
2004-05	100	83

Source: The wages in agricultural sector up to 1996-97 are from the Federal Bureau of Statistics and for later years it has been taken from the Agricultural Prices Commission.

 

VI.2     Public Sector Pay Structure

 

The salary structure of the public sector employees is fixed by the Pay and Pension Commissions announced by the Government time to time. Within the Government, the salary structures of the various public sector corporations are close to those of the private sector while the rest of the Government is stuck with 22 grades. The first pay commission of 1948-49 revised the existing pay scales due to high disparity in the pay scales of British officials and the local officers. The commission presented a judicious pay system for all employees that was accepted by the Government. Therefore, in 1970, the Pay and Pension Commission recommended adequate compensation and due recognition for high caliber individuals to attract them in the public sector.

 

In 1972, as many as 650 pay scales were compressed to 22 national pay scales. These pay scales are still in use and pay commissions of 1977, 1983, 1987, 1991, 1994, 2001 and 2005 have only recommended revisions with the declared objectives of narrowing the gap between the lowest and the highest scales[11]. The gap, however, remains fixed at 1:9 between 1991 and 2007 even with the last four salary revisions.

 

To determine the pay structure, the Pay Commissions consider and fix minimum wage as a reference point. It is ensured that the minimum wages are set so that it is sufficient to meet the basic needs of the household. Prior to the last revision of 2005, all relief and indexation granted in the previous period were merged into basic salary. The inflationary pressures are also considered in the revisions. In 1990-91, for example, 39.4 percent increase was granted to the lowest grade-1 when the inflation rate was 13 percent. Employees of other grades also got increase in their respective salaries but at the declining rate. An employee of grade 12 was granted the increase of 27 percent in the scale. All the grades above that received a fixed mark-up of 26 percent. In June 1994, the increase was revised from 2.7 percent for grade 1 to 20 percent for grade 22 with the inflation rate of 11.5 percent.

 

The next revision was carried out after a period of six years with a shift in the existing policy. In December 2000, the maximum limit of the relief allowance (a special additional allowance) was fixed and excluded from the computation of the total basic salary. Due to this exclusion, the increase in the salary for grades 1 to 17 was from 8 to 22.2 percent and 49.5 percent for the grades 18 to 22. In 2005 revision, all the three relief allowances granted between December 2001 and July 2005 were frozen for all the grades, and the basic minimum salaries of all grades in 2001 were increased by 15 percent to arrive at the new pay scales. The ratio of the highest to the lowest paid remained 1:9 over the four revisions and further the wages of the public sector employees did not take into account the inflation rates of 9.3 percent in 2004-05 and 6.6 percent in 2005-06. This means although the average nominal increases fluctuated from 29.5 percent in 1991 to 9.9 percent 1994, 23.6 percent in 2001, and 15 percent in 2005, the real wages continued to decline overtime.

 

VI.3     Industrial Workers Minimum Wage Fixation System

 

The minimum wages of industrial workers in Pakistan have been fixed through legislation. The laws that relate to minimum wages in Pakistan are based on two separate systems: one seeks to fix the minimum rates of wages of unskilled workers whereas the other undertakes the review of minimum rates of wages periodically. This review is under-taken in respect of all categories of workers employed in different industries. The laws enacted to meet these objectives are:

 

·        West Pakistan Minimum Wages for Unskilled Workers Ordinance, 1969.

·        Minimum Wages Ordinance, 1961.

 

The West Pakistan Minimum Wages for Unskilled Workers Ordinance was applicable to industrial and commercial establishments throughout Pakistan with 50 or more persons employed on any day or throughout the year. While fixing minimum rates of wages for employed unskilled workers under the Ordinance, the following is kept in view:

 

·        If the existing wages are higher than the minimum wages fixed, the existing wages shall not be reduced. The employer shall, however, be at liberty to pay higher wages of his own accord unilaterally or by collective agreement keeping in view any consideration including better experience, higher cost of living in a particular locality or for similar other reasons,

 

·        The workers shall continue to enjoy such facilities regarding house, house-rent, water, electricity, conveyance, free medical aid, gratuity, pension, bonus, any form of insurance, provident fund, recreation, subsidized food, education, holidays and leave with pay, attendance allowance and any other benefits already provided by the employers, and

 

·        An adult female worker shall get the same minimum wage as a male worker would get for work of equal value.

 

The minimum wage includes dearness allowance, house rent allowance, conveyance and other allowances, which were of fixed nature. Between 1969 and 1972, no change in wage was allowed. However, to integrate rising cost of living in the wages, Employees Cost of Living (Relief) Act, (ECOLA) was enacted in 1973. Thus, the workers during 1973-86 received wage rise under COLA that largely became part of the wages.

 

The West Pakistan Minimum Wages for Unskilled Workers Ordinance, 1969 has been further amended by the Minimum Wages for Unskilled Workers (Amendment) Act, 1993 to give a uniform increase in the workers' wages throughout Pakistan by fixing them at Rs. 1,500 a month. The authorized deduction from this minimum wage could only be in lieu of housing accommodation and transport and that too different rates in different area. For example, housing and transport deductions in Karachi District were Rs 25 and Rs 10 per month respectively. In Industrial areas these deductions were Rs 20 and Rs 5 while in other areas these were Rs 15 and Rs 2.

According to the amended Act, the term “wage” has been defined to include cost of living allowance as admissible under the ECOLA 1973, dearness allowance and special allowance announced by the Government from time to time, before the commencement of the West Pakistan Minimum Wages for Unskilled Workers (Amendment) Act, 1993.

The Minimum Wages Ordinance, 1961 has been enacted to provide for the regulation of minimum rates of wages for workers employed in certain industrial undertakings. The Tripartite Minimum Wage Boards under the Ordinance have been set-up at the provincial level which have been assigned the statutory task to review the minimum rates of wages for: i) time work, ii) piece-rate work, iii) over-time work, iv) work on weekly rest day of rest, and v) for paid holidays. The minimum time rates for workers employed on piece work are to guarantee minimum wages on a time basis for such workers. These Boards act in a recommendatory capacity. The recommendations become enforceable if they are accepted by the respective provincial Governments.

The provincial Minimum Wages Boards are also competent to review periodically their recommendations if any change in the economic conditions and cost of living and other relevant factors so demands. The recommendations resulting from such review become enforceable if they are adopted by the respective Provincial Governments which is vested with the power to declare these recommendations as minimum rates of wages with any amendment or modification or revision.

The Provincial Minimum Wages Boards (PMWBs) undertake periodical review of their recommendations on industry-wise. The different categories of workers included for wage recommendations are: i) unskilled, ii) semi-skilled, and iii) skilled. Additional members are appointed to represent workers and employers of the industry concerned for the purpose of undertaking the review. These awards do mark variation in the level of minimum rates of wages for different categories of workers depending upon their skill, experience, expertise and nature of the job involved. Tin case of the largest province Punjab, the MWB recommended to the Provincial Government minimum wages for workers in 51 industries in August 2007 (TPG 2007).

The determination and fixation of minimum wage, besides Minimum Wage Board, has also been assigned to Wage Commission set-up under the Industrial Relations Ordinance, 1969 for the employees of banks and financial institutions and the Wage Board appointed under the Newspaper Employees (Condition of Service) Act, 1973 for newspaper employees.

Minimum wages for unskilled workers have being revised upward quite a few times in the recent past. These revisions taking place in recent years are as under:

·        Rs 1,950 per month in 1998

·        Rs. 2,500 per month in 2001,

·        Rs 4,000 per month in 2005,

·        Rs.4,600 per month in 2007, and

·        Rs.6,000 per month in 2008.

 

VI.4     Income Distribution

The level of inequality in Pakistan has tended to be moderate, with the gini coefficient of household income around 0.35 or below, table-15. However, the gini coefficient reached 0.407 in 1990-91 and declined slightly to 0.400 in 1996-97, but increased to 0.410 percent in 1998-99 and 2000-01. In 1990-91, the income share of the bottom 20 percent of households fell to just 5.7 percent, after being in the range of 7.5 to 8.0 percent during the 1970s and 1980s. With the share of the upper quintile rising, the ratio of the share of the top quintile to that of the bottom quintile rose to an unprecedented 8.6 percent in 1990-91. The income share of the bottom 20 percent of households increased from 5.7 percent in 1990-91 to 6.2 in 1998-99 but then declined to 5.2 percent in 2000-01. It is important to point out here that throughout 1990s the share of the poorest had been lower than in 1987-88.

Table-15

Household Income Distribution in Pakistan

Year	Household Gini Co-efficient	Household Lowest 20%	Income Middle 60%	Share Highest 20%	Ratio of Highest 20% to Lowest 20%
1979	0.373	7.4	47.6	45.0	6.1
1984/85	0.369	7.3	47.7	45.0	6.2
1985/86	0.355	7.6	48.4	44.0	5.8
1986/87	0.346	7.9	48.5	43.6	5.5
1987/88	0.348	8.0	45.3	43.7	5.5
1990/91	0.407	5.7	45.0	49.3	8.6
1992/93	0.410	6.2	45.6	48.2	7.8
1993/94	0.400	6.5	46.3	47.2	7.3
1996/97	0.400	7.0	43.6	49.4	7.1
1998/99	0.410	6.2	44.1	49.7	8.0
2000-01	0.410	5.2	48.2	46.6	9.0

Source:  Pakistan Economic Survey (various issues) and Pakistan Institute of Development Economics (PIDE).

 

            Household income distribution appears to have worsened more in rural areas than in urban areas. The gini coefficient in rural areas increased from 0.31 in 1987-88 to 0.41 in 1996-97 and increased further to 0.43 in 2000-01, table-16. The share of the lowest 20 percent of households has declined; those at the top experienced gains, which resulted in an increase in the highest to lowest income ratio. In the urban areas, the income inequalities seemed to have increased a little from 0.37 in 1987-88 to 0.38 in 1996-97; it further increased to 0.39 in 2000-01. The share of the lowest 20 percent in urban areas increased and that of the highest income group remained somewhat constant. The changes in income distribution during 1990s are a cause for serious concern regarding distribution of the fruits of economic growth in Pakistan.

 

Table-16

            Household Income Distribution by Rural-Urban Areas

Year	Rural Share		Gini Coeff.	Urban Share		Gini Coeff.
	Lowest 20%	Highest 20%		Lowest 20%	Highest 20%
1979	8.3	41.3	0.32	6.9	48.0	0.40
1984/85	7.9	42.8	0.34	7.0	47.7	0.38
1985/86	7.9	40.0	0.33	7.5	45.0	0.35
1986/87	8.0	39.0	0.32	7.9	44.0	0.36
1987/88	8.8	40.0	0.31	6.4	48.1	0.37
1990/91	6.0	47.4	0.41	5.7	50.5	0.39
1992/93	7.0	44.8	0.37	6.1	48.9	0.42
1993/94	7.4	43.1	0.40	6.7	47.1	0.35
1996/97	7.3	49.3	0.41	7.6	47.0	0.38
1998-99	6.9	46.8	0.40	6.0	50.0	0.33
2000-01	3.6	48.8	0.43	7.1	45.5	0.39

Source: Pakistan Economic Survey (Various issues) and PIDE.

 

VII.   Collective Bargaining

The statutory benefits to workers are comprised of: i) workers’ share in profits (5%), ii) statutory bonus (one month pay), iii) service gratuity (30 days wages for each year of employment), iv) maternity benefits (12 weeks with pay/wages), v) children education (Rs. 100 p.m.), vi) construction of housing colonies for the workers, vii) social security benefits (such as: health care for the secured workers and his/her dependents and cash benefit in case of sickness, invalidity and death, etc.), vii) employees old-age benefits, viii) group insurance, ix) holidays with pay, etc. In addition to these statutory benefits under the labor laws, the adjustment of rights takes place through collective bargaining including adjudication in Labor Courts.

The industrial workers’ wages are negotiated in the formal organized sector through the process of collective bargaining; periodically enhanced by arriving at collective agreements between the concerned parties. A CBA under the provisions of Industrial Relations Act 08 (IRA 08) serves a notice of its “charter of demand” to the management requesting for initiation of negotiations. Alternately, the management can also serve a “notice of demand” to its CBA under the IRA[12].

 

The collective bargaining may contain matters, such as: facilities in the establishment for trade union activities and procedures for settling collective disputes including grievances and disciplinary procedures. Substantive provisions settle terms and conditions of employment, wages and salaries, hours of work, holiday entitlement and pay, level of performance, job grading, lay-offs, retrenchment, sick pay, pensions and retirement schemes. The areas that normally form part of negotiations are:

·        Wages/salaries

·        Bonuses

·        Rent (House)

·        Conveyance allowance

·        Production allowance

·        Overtime

·        Maternity benefits/delivery package for female workers

·        Making temporary workers permanent

·        Filling vacant posts in consultation with CBA

·        Job quota for workers’ children

·        Scholarships for workers’ children

·        Promotion of skilled workers to next grade/scale

·        Loans for housing and motor cycle

·        Burial of deceased/death grant

·        Haj/pilgrimage

 

 

The agreements invariably are in writing and normally drafted with care; they are meant to settle disputes rather than raise them. A copy of the collective bargaining agreement is sent to the Ministry of Labor and Manpower, the NIRC and Provincial Registrar of the unions. The agreements once duly executed by both parties become the source of law. The IRA has provisions permitting any CBA or any employer to apply to the Labor Court for the enforcement of any right guaranteed or secured by law or any award or settlement[13].

 

 

Indeed, level of workers’ wages in the organized sector is reasonably high and the workers of such sector thus receive fairly better wages as compared to others. The collective agreements resulting from bargaining negotiations not only serve as instruments to improve wage structure but do also secure workers numerous financial and fringe benefits.

 As for wages of newspaper employees, they are revised in by the decisions taken by their Wage Board. It would be observed that these employees are relatively better paid as compared to other industrial workers of different categories. In addition, they are also allowed a number of fringe benefits. For the purpose of fixing the wages of the employees of banks and financial institutions, Wage Commission is constituted periodically depending upon the market conditions. It is nevertheless important to point out that the employees of these institutions are paid higher wages and they also undertake collective bargaining for the determination of their conditions of employment.

Whereas, collective bargaining is normally done at the plan level, it is also done at the nation-wide level by a number of industrial unions. The PWF affiliate WAPDA Hydro Electric Central Labor Union representing 150,000 working women and men and CBA – winning also the last four referendums - has been undertaking collective bargaining for decades. Some other unions undertaking nation-wide unions are as under:

 

·        P.T.C. Employees Union CBA

·        UBL Employees Union

·        Railway Workers Union CBA

·        Sui Northern Gas Employees Union CBA

·        Oil & Gas Employees Union CBA

·        All Pakistan PWD Employees Union CBA

 

VII.2               Collective Bargaining Agreements

         

This section looks into a number of collective bargaining agreements reached between the management and collective bargaining agents (CBAs). The paucity of the information on such agreements and the details needed notwithstanding, efforts have been made to document agreements: i) reached in two successive periods, ii) reached in two plants/sites of the principal employer in the same year, iii) reached between mineral related two public sector organizations – one federal and other provincial, iv) reached by few private sector management in oil and gas, and weaving and spinning, and vi) importantly, reached through an industrial action – lock out by management, factory gate sit-in by employees, court case and conciliation.

 

VII.2.i Two Consecutive Collective Bargaining Agreements

 

Textiles, Spinning and Weaving

 

The first charter of demand was served in August 2004 and process of negotiations continued with mutual consent for about ten months. An agreement was reached on 29^th June 2005. The negotiations led into agreement with significant difference between the charter of demand on different variables and the agreement reached. Whereas, the demand for an increase in bonus ranged from 35-50 percent, the increase in bonus agreed upon ranged of 26-32 percent; those taking no or lesser leave to get full and greater proportion of the bonus. The rise in annual increment was @ Paisas 60/day and Rs. 16/month respectively for permanent workers and clerical staff as opposed to the demand for a 10 percent rise in wage/salary.

 

One permanent worker will be sent for Haj (Pilgrimage) every year. The demand was three permanent workers and, in addition, those workers who are going on their own be given 45 days paid leave. 

 

The amount of distress loan on concessional basis available for workers was increased by Rs. 1000,000. The demand was of Rs. 20,000 for each worker in distress with recovery period increased from 12 months to 60 months. The amount of “eid advance” was raised by Rs. 200 which is to be repaid as opposed to the demand for a rise from Rs. 600 to Rs. 1,500 and that too as “eid gift”.

 

The second charter of demand was served in August 2006 and process of negotiations continued with mutual consent for about eleven months. The agreement reached on 18^th July 2007. It is worth mentioning that variables and/or items that were part of the negotiations in the first collective agreement were not taken up for revision in the new charter of demand. Furthermore, on both occasions the management also served its own charter of demand.

 

Special allowance to be gradually decreased and amount given as annual increment will be deducted for the said allowance to gradually reduce the said special allowance. The demand, however, was that special allowances be integrated in the basic pay and the merged wage used for overtime, gratuity and bonus.

 

The union had filed a petition in the court for payment of Rs. 435/month to worker in addition to minimum wage and if demand is accepted the union will withdraw the legal case. This demand led into the agreement that: i) the fixation of minimum wage of a worker will exclude monthly: i) canteen allowance of Rs. 70, ii) house rent allowance of Rs. 50, and  iii) conveyance allowance of Rs. 50. The union agreed to withdraw the case filed in the court.

 

            The demand that retirement age be raised to 60 years as is applicable to the Government Offices led into agreement that the said age for men and women respectively will be 60 and 55 years.

 

The union demanded 40 meters of good quality cotton and 8 meters of factory made warm cloth to every worker in a year. The agreement, however, that instead of 25 meters of  cotton cloth to permanent worker/eligible worker, 5 meters of mills made cloth for Shalwar-Kameez (trouser and shirt) @ Rs165/meter will be given to a worker. However, if the price increases then additional mount is to be paid by the worker.

 

 

 

Table - 17

Salient Features of Two Collective Bargaining Agreements

 Of a ISO Certified Worsted Fabrics Producer

	First Agreement – Year 2005	Second Agreement – Year 2007
Date of Charter of Demand Served by the Union	August 2004	August 2006
Date of Charter of Demand Served by the management	August 2004	August 2006
Date of agreement and tenure	For two years w.e.f. 26 August 2004 Agreement reached on 29 June 2005	For two years w.e.f. 26 August 2006 Agreement reached on 18 July 2007
Rate of Annual Bonus	Demand: Be raised from 35% to 50% and rate also applicable to those taking 5 unpaid leaves Agreement:  Bonus Rate:  36%, 32%, 29% & 26% for workers respectively taking unpaid annual leave and/or absenting in a year for 2 days, 3-5 days, 6-10 days and more than 10 days.	NA
Annual Increment	Demand: Should be minimum 10% Agreement:  Permanent and clerical workers respectively to get @ Paisas 60/day and Rs. 16/month	NA
Sending for Haj (Pilgrimage) with full pay	Demand: 1) 3 permanent workers selected through ballot sent for Haj with 45 days leave with pay, 2) any worker intending to perform Haj on his own be given 45 days leave with pay   Agreement:  1 permanent worker or an Officer selected through  ballot only	NA
Concessional Loan for Workers in Distress	Demand: The amount be raised to Rs. 200,000 and recoveries made in 60 months instead of 12 months Agreement:  Amount for this fund will be raised by Rs. 100,000 but other conditions would remain unchanged	NA
Eid Advance	Demand: The amount of advance be raised from Rs. 600 to Rs. 1,500 and be given as Eid Gift Agreement:  Amount increased by Rs.200 and to be repaid as well as other conditions would remain unchanged	NA
Punjab Province Special Allowances	NA	Demand: Special allowances be integrated in the basic pay and the merged wage used for overtime, gratuity and bonus Agreement:  Said allowance to be gradually decreased and amount given as annual increment will be deducted for the said allowance to gradually reduce the said special allowance
Special Allowances	NA	Demand: Union has filed a petition in the court for payment of Rs. 435/month to worker in addition to minimum wage and if demand is accepted the union will withdraw the legal case Agreement:  The fixation of minimum wage of a worker will exclude monthly: i) canteen allowance of Rs. 70, ii) house rent allowance of Rs. 50, iii) conveyance. allowance of Rs. 50. The union agreed to withdraw the case filed in the court.
Retirement Age	NA	Demand: Retirement age be raised to 60 years as is applicable to the Government Offices Agreement: The age for men and women respectively 60 and 55 years
Good Quality Cotton to Workers During Ramazan	NA	Demand: 40 meters of good quality cotton and 8 meters of factory made warm cloth to every worker Agreement: Instead of 25 meters of  cotton cloth to permanent worker/eligible worker 5 meters of mills made cloth for Shalwar-Kameez (trouser and shirt) @ Rs165/meter and if the price increases then additional mount to be paid by the worker
General Conditions	The union undertakes to: i) no additional financial demand during the currency of agreement, ii) help in raising production and quality, iii) maintain discipline and industrial peace, iv) help management  in eliminating wastage of time The agreement is not applicable to other units of the employer	The union undertakes to: i) no additional financial demand during the currency of agreement, ii) help in raising production and quality, iii) maintain discipline and industrial peace, iv) help management  in eliminating wastage of time The agreement is not applicable to other units of the employer Facilities available due to earlier agreements will be continued as per the existing labor laws

 

A Public Sector Insurance Company

 

The first charter of demand was served in January 2005 and process of negotiations continued with mutual consent for about six months. An agreement was reached on 29^th June 2005, table 18. The pay scales of unionized staff were revised by 15 percent with effect from 1^st January 2005 i.e. the date of start of the agreement. The conveyance allowance increased from Rs. 655- 850/month to Rs. 753-978/month for two categories of unionized workers. The medical allowance increased from Rs. 1,800/month to Rs. 2,070/month. The education allowance increased from Rs. 300/child to Rs. 345/child for maximum of three children. The canteen allowance increased from Rs. 700/month to Rs. 1,000/month. The utility allowance increased from Rs. 550/month to Rs. 633/month. The burial expenses coverage increased from Rs. 10,000 to Rs. 20,000. The cost of living allowance and compensatory allowance respectively Rs. 300 and Rs. 50/month, as agreed in the last agreement, will be continued.

 

The union agreed that: i) that all demands deemed to have been settled, satisfied and withdrawn in accordance with and/or in consideration of this agreement, ii) and undertakes that during the period of agreement, it shall not raise or pursue any demand  having direct or indirect additional financial bearing, iii) that cash benefits given in this settlement are to meet increase in cost of living and any such measures announced by the Government will not be claimed by CBA; the balance will be given only for the benefits that are over and above the settlement; and iv) it will maintain discipline and cooperate fully and effectively with the management to maintain efficiency and to increase profitability.

 

The second charter of demand was served in January 2007 and process of negotiations continued with mutual consent for about seven months. An agreement was reached on 30th July 2007. The basic pay, it was agreed, will be fixed as on 31.12.2006 at appropriate stage of revised pay scale after first merging of Rs/ 50/month compensatory allowance and Rs. 300/month cost of living allowance, and thereafter 25%increase. The conveyance allowance increased from Rs. 753-978/month to Rs978-1,200/month for two categories of unionized workers. The medical allowance increased from Rs. 2,070/month to Rs. 2,800/month. The education allowance, maximum for three children, increased from Rs. 345/child/month to Rs. 600/child/month. The canteen and utilities allowances increased respectively from Rs. 1,000/month to Rs. 1300/month and from Rs. 633/month to Rs. 1,000/month.

 

A number of new items added by the union in the charter of demand were also collectively agreed.  The management agreed to extend Haj facility to 3 employees and 2 officers through balloting every year from PRCL Employees Welfare Fund. It also agreed

Group insurance for employees of category 1 and 2 respectively to have coverage of  Rs150,000 and Rs. 180,000 for death and permanent disability (earlier it was Rs. 100,000 and Rs. 120,000).

 

The agreement was also reached with regard to loans for staff. The management agreed to allocate Rs 20million to entertain pending applications for house building, house repairing, house rent advance, motor car/cycle advances and marriage loan for female employees only.

 

In case of death of an employee during service, the balance amount of any loan/advance will be waived off purely on humanitarian grounds. The agreement also reached on the early and quick settlement of final dues on retirement or of the deceased employees; to be done within one month of retirement or death of an employee.

 

The union agreed: i) that all demands deemed to have been settled, satisfied and withdrawn in accordance with and/or in consideration of this agreement, ii) and undertakes that during the period of agreement, it shall not raise or pursue any demand having direct or indirect additional financial bearing, iii) to maintain discipline and cooperate fully and effectively with the management to maintain efficiency and to increase profitability.

 

 

Table - 18

Salient Features of Collective Bargaining Agreements

Of a Public Sector Insurance Company

	First Agreement – Year 2005	Second Agreement – Year 2007
Date of Charter of Demand Served by the Union	January 2005	January 2007
Date of Charter of Demand Served by the management	NA	NA
Date of agreement and tenure	For two years w.e.f. 1 January 2005 Agreement reached on 29 June 2005	For two years w.e.f. 1 January 2007 Agreement reached on 30 July 2007
Revision of Pay Scales	Agreement:  15% increase in existing pay scale of unionized staff w.e.f. 1.1.05	Agreement: The basic pay will be fixed as on 31.12.2006 at appropriate stage of revised pay scale after first merging of Rs/ 50/month compensatory allowance and Rs. 300/month cost of living allowance, and thereafter 25%increase.
Conveyance Allowance	Agreement:  Increased from: a) Rs. 655/month to Rs. 753/month, and b) Rs. 850/month to Rs. 978/month	Agreement:  Increased from: a) Rs. 753/month to Rs. 950/month, and b) Rs. 978/month to Rs. 1,200/month
Medical Allowance (outdoor including medicine and laboratory tests)	Agreement:  Increased from Rs. 1,800/month to Rs. 2,070/month	Agreement:  Increased from Rs. 2,070/month to Rs. 2,800/month
Education Allowance	Agreement:  Increased from Rs. 300/child/month to Rs. 345/child/month (maximum for three children)	Agreement:  Increased from Rs. 345/child/month to Rs. 600/child/month (maximum for three children)
Canteen Allowance	Agreement:  Increased from Rs. 700/month to Rs. 1,000/month	Agreement:  Increased from Rs. 1,000/month to Rs. 1300/month
Utilities Allowance	Agreement:  Increased from Rs. 550/month to Rs. 633/month	Agreement:  Increased from Rs. 633/month to Rs. 1,000/month
Burial Expenses	Agreement:  Increased from Rs. 10,000 to Rs. 20,000
Cost of Living and Compensatory Allowance	Agreement:  As per the last agreement i.e. Rs. 300/month for cost of living allowance and Rs. 50/month for compensatory allowance will continue unchanged	Agreement: Rs.3 00/month  cost of living allowance and Rs. 50/month compensatory allowance shall cease with w.e.f. 1st January 2007
Vaccination Courses	NA	Agreement: management to extend facility of OPD for Polio and Hepatitis A, B & C vaccinations to employees and their dependents.
Haj Facility	NA	Agreement: management to extend Haj facility to 3 employees and 2 officers through balloting every year from PRCL Employees Welfare Fund
Group Insurance	NA	Agreement: Employees of category 1 and 2 respectively to have coverage of Rs150,000 and Rs. 180,000 for death and permanent disability (earlier it was Rs. 100,000 and Rs. 120,000)
Budget for Loans and Advances	NA	Agreement: Rs 20million will be allocated to entertain pending applications for house building, house repairing, house rent advance, motor car/cycle advances and marriage loan for female  employees only
Waiving of Outstanding Loans/Advances of Deceased Employee	NA	Agreement: In case of death of an employee during service, the balance amount of any loan/advance will be waived off purely on humanitarian grounds.
Settlement of Final Dues on Retirement or of the Deceased Employees		Agreement: To be settled within one month of retirement or death of an employee.
General Conditions	The union agrees: i) that all demands deemed to have been settled, satisfied and withdrawn in accordance with and/or in consideration of this agreement, ii) and undertakes that during the period of agreement, it shall not raise or pursue any demand  having direct or indirect additional financial bearing, iii) that cash benefits given in this settlement are to meet increase in cost of living and any such measures announced by the Government will not be claimed by CBA; the balance will be given only for the benefits that are over and above the settlement; iv) to maintain discipline and cooperate fully and effectively with the management to maintain efficiency and to increase profitability.	The union agrees: i) that all demands deemed to have been settled, satisfied and withdrawn in accordance with and/or in consideration of this agreement, ii) and undertakes that during the period of agreement, it shall not raise or pursue any demand having direct or indirect additional financial bearing, iii) to maintain discipline and cooperate fully and effectively with the management to maintain efficiency and to increase profitability.

 

VII.2.ii            Two Collective Agreements of a Company Having Plants in Different Citifies

 

Tobacco and Cigarettes Manufacturing

 

The charter of demand at the Korangi – Karachi plant was served in September 2006 and process of negotiations continued with mutual consent for about four months. An agreement with duration of three years was reached on 6^th February 2007, table 19.

 

Whereas demand was a rise of Rs. 1,000/month in the basic salary, the agreement was a flat increase of Rs. 170 in the basic pay of only permanent workers. The house rent and conveyance allowances were respectively increased by Rs. 55/month and from Rs. 145/month to Rs. 185/month for all eligible permanent workers.

 

The attendance allowance increased from Rs. 75 to Rs. 85/month for permanent workers whose authorized casual and sick leave do not respectively exceed one day and two days in a month.  Whereas, the demand for a rise of Rs. 50/month for permanent workers according to their nature of work is given as dust allowance of Rs.50/month, the agreement reached was a rise from Rs. 40 to Rs. 65/month to eligible permanent workers of primary processing department/leaf department.

 

The company agreed to give two Hero Motor Cycle Model RF 70 plus to eligible permanent workers a year on the demand of union that the number be raised from 1 to 10.

 

The union agreed to: i) extend full cooperation in attaining machine-wise production of desired quality at an efficiency level not less than 75%, ii) maintain/improve wastages in cigarette paper, tobacco, packing material at the targets fixed by the company,  iii) industrial peace, and iv) take no illegal action/act and maintain peace.

The charter of demand at the Kotri – Jamshoro plant was served in February 2007 and process of negotiations continued with mutual consent for about four months. An agreement was reached on 26^th June 2007.

 

Whereas there was no demand for house rent allowance, the monthly pat was increased by a flat rate of Rs. 25 in the basic pay of only eligible permanent workers.

 

The conveyance and attendances allowances were respectively increased from Rs. 65/month to Rs. 110/month and from Rs. 140 to Rs. 195/month for permanent workers whose authorized casual and sick leave do not  exceed two days in  a month.

 

The union agreed to: i) extend full cooperation in attaining machine-wise production of desired quality at an efficiency level not less than 75%, ii) maintain/improve wastages in cigarette paper, tobacco, packing material at the targets fixed by the company, and iii) not to raise any further additional/fresh/further demand involving financial implications or otherwise

 

 

Table - 19

Salient Features of Collective Bargaining Agreements

 Of a Tobacco Company for its Two Plants

	Korangi –Karachi Plant	Kotri-Jamshoro Plant
Date of Charter of Demand Served by the Union	September 2006	February 2007
Date of Charter of Demand Served by the management	NA
Date of agreement and tenure	For three years w.e.f. 1 October 2006 Agreement reached on 6 February 2007	For three years w.e.f. 1 May 2007 Agreement reached on 26 June 2007
Increase in Basic Pay	Demand: A rise of Rs. 1,000 Agreement:  A flat increase of Rs. 170 in the basic pay of only permanent workers.	Agreement:  A flat increase of Rs. 25 in the basic pay of only eligible permanent workers.
House Rent Allowance	Agreement:  A rise of Rs. 55/moth to all eligible permanent workers	NA
Conveyance Allowance	Agreement:  Increased from Rs.145/month to Rs. 185/month for all eligible permanent workers	Agreement:  Increased from Rs. 65/month to Rs. 110/month for workers
Eid Allowance	Demand: One bottle of cold drink (special drink in Indian Sub-continent) for Ramadan and amount of bonus for Eid doubled. Agreement:  One bottle of Rooh-Afza (cold drink) and Eid Allowance of Rs. 500 to be paid on 15th Ramadan.	NA
Umrah During Ramadan	Demand: The company sends 2 workers for Umrah during Ramadan Agreement:  One eligible worker will be sent for Umrah by the company in Ramadan	NA
Attendance Allowance	Agreement:  Increased from Rs. 75 to Rs. 85/month for permanent workers whose authorized casual and sick leave do not respectively exceed one day and two days in  a month	Agreement:  Increased from Rs. 140 to Rs. 195/month for permanent workers whose authorized casual and sick leave do not  exceed two days in  a month
Dust Allowance	Demand: Permanent workers according to their nature of work is given a dust allowance of Rs.50/month Agreement:  Allowance increased from Rs. 40 to Rs. 65/month to eligible permanent workers of primary processing department/leaf department	NA
Motor Cycle Scheme	Demand: One motor cycle is given to a worker under this scheme by the company; the number be raised to 10 motor cycles Agreement:  two Hero Motor Cycle Model RF 70 plus to eligible permanent workers a year	NA
General Conditions	The union agrees to: i) extend full cooperation in attaining machine-wise production of desired quality at an efficiency level not less than 75%, ii) maintain/improve wastages in cigarette paper, tobacco, packing material at the targets fixed by the company,  iii) industrial peace, iv) take no illegal action/act and maintain peace.	The union agrees to: i) extend full cooperation in attaining machine-wise production of desired quality at an efficiency level not less than 75%, ii) maintain/improve wastages in cigarette paper, tobacco, packing material at the targets fixed by the company, iii) not to raise any further additional/fresh/further demand involving financial implications or otherwise

 

VII.2.iii           Collective Agreements of Mineral Development Related Organizations

 

Provincial Company (Corporation)

 

The charter of demand was served in March 2004 and process of negotiations continued with mutual consent over a year. An agreement with duration of two years was reached on 27^th April 2005, table 20.

 

The collective agreement reached only on few of the demands raised; many were seen as being deferred by the management on one pretext or the other. The only “two” areas finding an upward revision on the basis of negotiations relate to rise in basic pay and maternity allowance. The union demanded an increase of Rs. 1,000 in the basic pay. The agreement reached, however, was a flat increase of Rs. 170/month only for the permanent workers. The demand for a maternity allowance of Rs. 4,000 nevertheless was agreed by the management.

 

 

Table - 20

Salient Features of Bargaining Agreement

 Of Mineral Development Related Corporation 

 

	Punjmin - Punjab
Date of Charter of Demand Served by the Union	March 2004
Date of Charter of Demand Served by the management	NA
Date of agreement and tenure	For two years w.e.f. 17 May 2005 Agreement reached on 27 April 2005
Increase in Basic Pay	Demand: A rise of Rs. 1,000 Agreement:  A flat increase of Rs. 170 in the basic pay of only permanent workers.
Eid Allowance	Demand: Rs. 5,000 be paid for each of the Eid View point of the management:  Representatives of CBA have as yet not provided precedent
Maternity Allowance	Demand: Rs. 4,000 be paid for confinement at home Agreement:  Maternity allowance up to the limit of Rs. 4,000
Provision of Ambulance	Demand: Free of cost ambulance provided or cost of fare for patient and attendant be paid Agreement:  Submit the case separately
Provision of Uniforms to Road Workers, Time Keepers Working at Quarries	Demand: Uniforms provided to Road Workers, Time Keepers Working at Quarries Agreement:  Uniform to the extent of present Road Workers at Mianwali
Job Quota to Dependents	Demand: Son of a Deceased Employee be provided service immediately Agreement:  As already in practice
Funeral Cost	Demand: Rs. 15,000 funeral cost of  deceased employee be borne by the employer Agreement:  As already in practice
Rise in House Rent Allowance	Demand: House rent allowance being paid @ 40% of running basic be increased to 60% of running basic Agreement:  A working paper to be prepared and put up before the Board of Directors
Conveyance Allowance	Demand: Conveyance @ Rs. 700/month and Rs. 1,000/month be paid for two different group/categories of employees Agreement:  Union advised to wait for the announcement of the government regarding enhancement of the allowance in the next budget
Project Allowance	Demand: This allowance be paid @30% of running basic to project employees Agreement:  Union advised to wait for the announcement of the government regarding enhancement of the allowance in the next budget
Payment of Bonus	Demand:  Number of  bonuses be raised to three Agreement:  A working paper to be prepared and put up before the Board of Directors
Haj Quota	Demand:  Four employees sent for Haj annually Agreement:  Four employees to be sent for Haj by the management every year
Encashment of Leave	Demand:  Unused earned leave be enchased on the basis of gross pay Agreement:  Encashment of 30 days earned leave
Special Daily Allowance	Demand:  Paid @50% without grading local and non-local Agreement:  Matter will be discussed with the concerned General Manager for approval
Union Office and Facilities	Demand: Union office be provided: 1) Rs. 2,000/month for providing refreshments to guests, 2) free direct telephone, 3) a full time attendant, and 4) newspaper Agreement:  Union office: 1) to get a justifiable increase in ration quota of tea, 2) matter of free direct telephone deferred, 3) a full time attendant is already provided, and 4) a daily newspaper will be provided
General Conditions	Besides the above: i) any increase in allowances o any other facilities announced by the Government should be awarded to the employees, and 2) provisions of IRO 2002 and other relevant laws should also be applicable to this settlement.

 

Federal Organization

 

The charter of demand was served in February 2005 and process of negotiations continued with mutual consent for about a year. An agreement with duration of two and half years was reached on 26 January 2006, table 21.

 

The negotiations led into an increase in: i) monthly salary in the range of Rs. 650 – 1,180, ii) rise in monthly salary/wage is based on statutory allowances, iii) the coal project employees, both regular and on daily wages, being paid two bonuses on the gross pay; this practice will be continued, and iv) wage rates increased for all categories of piece rate workers.

 

The negotiations with regard to the demand for an Increase in medical facilities and they also extended to “coal cutters” with less than 3 months service led into management agreeing to make  arrangements for the vaccination of Hepatitis B, extension of medical facility to “Coal Cutters” with less than 3 months service. However, medical operations requiring care in hospitals other than those on “panel” would be available to employees with 3 months service.

 

The negotiations also led into additional facilities for the workers with regard to: i) repairing of old bus and allocation of funds for the bus in next year as well as provision of 10 motor cycles – 5 each for the project employees and those in the zonal office – on concessional loans, ii) payment of overtime as per the existing law, and iii) provision of uniform to other categories of employees together with shoes.

 

The management on the union demand that the promotion of employees is done on the basis of performance and seniority, agreed for promotion to next grade as: 1) selection grade to one each stenographer, stock checker, store keeper & office assistant, 2) 2 UDCs in accounts section as assistants, 3) 2 UDCs in administration section as assistants, 4) 2 time keepers next grade, 5) 3 haulage drivers given next grade, 6) 1 mining worker “sardar” regularized, and 7) allowance of head drivers increased by Rs. 50/month.

 

The union agreed not to make any additional demand during the currency of the agreement except the one concerning the payment of legal bonus (s).

 

 

Table - 21

Salient Features of Bargaining Agreement

 Of a Coal Project of Mineral Development Related Corporation

	Lakhara Coal Project
Date of Charter of Demand Served by the Union	February 2005
Date of Charter of Demand Served by the management	NA
Date of agreement and tenure	For two and half years w.e.f. 1 January 2005 Agreement reached on 26 January 2006
Increase in Pay	Demand: Increase in wages/salary Agreement:  The monthly salary/wage increased in the range of Rs. 650 – 1,180.
Allowances are Merged in Salary/Wages	Demand: Allowances are merged in salary/wages Agreement:  The monthly rise salary/wage is based on the statutory allowances.
Bonus	Demand: Payment of Bonus Agreement:  The coal project employees, both regular and on daily wages, are being paid two bonuses on the gross pay; this practice will be continued. The bonus to be inclusive of statutory bonus under 10-C of West Pakistan Industrial and Commercial Standing Order Ordinance 1968.
Medical Facilities	Demand: Increase in medical facilities and extended to “coal cutters” with less than 3 months service Agreement:  Medical facilities will remain unchanged. However, arrangements will be made for the vaccination of Hepatitis B. Medical facility will also be extended to “Coal Cutters” with less than 3 months service. However, medical operations requiring care in hospitals other than those on “panel” would be available to employees with 3 months service.
Conveyance	Demand: Conveyance facilities are improved Agreement:  I) The old bus will be repaired and allocation of funds for new bus will be made next year, and 2) 10 motor cycles for workers on concessional loans, 5 each for the project employees and zonal office.
Payment of Overtime	Demand: Rate of overtime be increased Agreement:  The existing rate under the law will be applied.
Uniform	Demand: Uniform also provided to other categories of employees Agreement:  The uniform will also be provided to other category of employees together with shoes.
Promotion of Employees	Demand: Promotion to employees given on better performance and basis of seniority Agreement:  Promotion to next grade as: 1) selection grade to one each stenographer, stock checker, store keeper & office assistant, 2) 2 UDCs in accounts section as assistants, 3) 2 UDCs in administration section as assistants, 4) 2 time keepers next grade, 5) 3 haulage drivers given next grade, 6) 1 mining worker “sardar” regularized, and 7) allowance of head drivers increased by Rs. 50/month
Piece Rate Workers	Demand: Increase Wages of piece rate workers Agreement:  Rates increased for all categories of piece rate workers
General Condition	The union will not make any additional demand during the currency of the agreement except the one concerning the payment of legal bonus (s).

 

 

VII.2.IV Two other Collective Agreements

 

Spinning and Weaving Mill

 

The charter of demand was served in April 2007 and process of negotiations was completed within two months. An agreement with duration of two years was reached on 29 June 2007, table 22. It may be pointed out that this agreement was made a management of a company that showed net loss in the preceding year of accounts.

 

The union pleaded that inflation and” rise in cost of living justify increase in salaries”. The management view was that as a special case and without quoting it as precedence wages of workers already increased since 1^st September 2006 averaging Rs. 38.47/day.  The management also agreed payment of profit bonus as per the law to the entitled worker subject to net profit for the year ending 30^th June 2007.

 

The management and union also agreed that any increase by the Government in the shape of: increase in wages and/or cost of living allowance or (Province) Sindh special allowance during the operation of settlement shall be set-off and adjusted against the increase given in the agreement. And if there is no set-off clause, then the increase granted in the agreement will be withdrawn and those notified by the Government will be applied.

 

     The union accepted the mill running net losses up to 30^th June 2006 and also agreed not to raise any financial or non-financial demand during the currency of the agreement.

 

Table - 22

Salient Features of a Collective Bargaining Agreement

 Of a Mill Showed no Net Profit in the Preceding Year

Date of Charter of Demand Served by the Union	April 2007
Date of Charter of Demand Served by the management	NA
Date of agreement and tenure	For two years w.e.f. 1 January 2007 Agreement reached on 29 June 2007
Increase in Wages	Demand: Union pleaded that inflation and rise in cost of living justify increase in salaries Agreement:  The management as a special case and without quoting it as precedence already increased wages of workers since 1st September 2006 averaging Rs. 38.47/day
Payment of Bonus	Agreement:  Management agreed profit bonus as per the law will be paid to the entitled worker subject to net profit for the year ending 30th June 2007.
General Provision	Agreement:  The management and union agree that any increase by the Government in the shape of: increase in wages and/or cost of living allowance or (Province) Sindh special allowance during the operation of settlement shall be set-off and adjusted against the increase given in the agreement. And if there is no set-off  clause, then the increase granted in the agreement will be withdrawn and those notified by the Government  will be applied
General Conditions	The union accepts mill running net losses up to 30th June 2006 The union agrees not to raise any financial or non-financial demand during the currency of the agreement.

 

Oil and Gas

 

The charter of demand was served in December 2005 and process of negotiations with mutual consent continued for over a year. An agreement with duration of two years was reached on 25 January 2005, table 23. It may be pointed out that this agreement was made a management of a company that showed net loss in the preceding year of accounts.

 

The union demanded a rise in basic wage by 35%, 30% and 25% respectively for employees having monthly salary of less than Rs. 6,000, between 6,001 to 10,000 and over Rs. 10,000. The negotiations led into an agreement of a wage increase of 19% w.e.f.1 July 2005 with the condition that any increase announced by the Government in future would be subject to negotiations between management and CBA.

 

The union demanded a rise in house rent allowance by 55% and 50% for employees respectively at head office and in field. The agreement reached was: an increase from: 1) 18% to 20% of basic pay for filed staff living on their own accommodation, and 2) Rs. 1,700 to Rs. 2,200 for the head office staff.

 

The negotiations led to an increase of: i) utility allowance from 6% to 10% for each worker in regular employment and drawing house rent allowance, ii) shift allowance by Rs. 100/moth – raised from Rs. 200 to Rs. 300, iii) drilling allowance by Rs. 40 on average for all drilling workers and now it range from Rs. 310 – 645 for different categories of workers, iv) special allowance from Rs. 85 to Rs. 150, and v) conveyance allowance from Rs. 75 to 100/month.

 

The union demanded increase in  messing  allowance by: i) Rs. 30, Rs. 90 and Rs. 120 respectively for breakfast, lunch  and dinner, ii)  Rs. 400/day for lodging/overnight stay, and iii) Rs. 150/day for head office workers. The negotiations increased  allowances related to official traveling: i)  from Rs. 40 to Rs 50 each for lunch and dinner, ii)  from Rs. 200 to Rs. 250 for big cities only, iii) from Rs. 105 to Rs. 125/day, and from Rs. 30 to Rs. 60/day for head office staff to compensate the non-availability of canteen. The clothing allowance increased from Rs. 50 to Rs 75/month.

 

The union demanded that loan facility of Rs. 500,000 be provided to each worker without interest for house building/purchase and/or vehicle. The agreement, however, focused on recovery of loan. Instead of the repayment in 24 month as practices currently, now the loans to be repaid in 36 equal installments.

 

 

 

Table - 23

Salient Features of a Collective Bargaining Agreement

Of an Oilfield Company

 

Charter of Demand Served by the Union	December 2005
Charter of Demand Served by the management	NA
Date of agreement and tenure	For two years w.e.f. 1 July 2005 Agreement reached on 25 January 2007
Basic Wages	Demand: Basic wages should be increased by 35%, 30% and 25% respectively for employees having monthly salary of less than Rs. 6,000, between 6,001 to 10,000 and over Rs. 10,000 Agreement:  Wages increased by 19% w.e.f.1 July 2005 with the condition that any increased announced by the Govt would be subject to negotiations between management and CBA
House Rent	Demand: House rent allowance should be increased by 55% and 50% for employees respectively at head office and in field. Agreement:  Increased from 1) 18% to 20% of basic pay for filed staff living on their own accommodation, and 2) Rs. 1,700 to Rs. 2,200 for head office staff
Utility Allowances	Demand: May be increased by 45% for all employees Agreement:  Increased from 6% to 10% for each workers in regular employment and drawing house rent allowance
Shift Allowance	Demand: 20% of basic pay to all shift workers Agreement:  Increased from Rs. 200 to Rs. 300 per month
Drilling Allowance	Demand: May be 50% of all allowances Agreement:  Increased by Rs 40 for all drilling workers and now it range from Rs. 310 – 645 for different categories of workers.
Special Allowance	Demand: Agreement:  Increased from Rs. 85 to 150/month for all entitled workers
Cycle Allowance	Demand: Agreement:  Increased from Rs. 65 to 100/month
Conveyance Allowance	Demand: Should be @ 40% of basic pay Agreement:  Increased from Rs. 75 to 100/month
Messing  Allowance	Demand: Mess allowance may be increased by: i) Rs. 30, Rs. 90 and Rs. 120 respectively for breakfast, lunch  and dinner, ii)  Rs. 400/day for lodging/overnight stay, and iii) Rs. 150/day for head office workers Agreement: Allowance related to official traveling increased: i)  from Rs. 40 to Rs 50 each for lunch and dinner, ii)  from Rs. 200 to Rs. 250 for big cities only, iii) from Rs. 105 to Rs. 125/day, and from Rs. 30 to Rs. 60/day for head office staff to compensate the non-availability of canteen.
Clothing Allowance	Demand: Agreement:  Allowance increased from Rs. 50 to Rs 75/month.
Loan	Demand: A loan facility of Rs. 500,000 be provided to each worker without interest for house building/purchase and/or vehicle Agreement:  Existing loan now will be recovered in 36 equal monthly installments instead of current practice of recovery in 24 monthly installments.
General Conditions	Besides the above: i) any increase in allowances of any other facilities announced by the Government should be awarded to the employees, and 2) provisions of IRO 2002 and other relevant laws should also be applicable to this settlement.

 

VII.2.V Collective Agreements Reached after Industrial Action and Conciliation

 

Cement Factory

 

The charter of demand was served in July 2006 and process of negotiations disrupted for years. Consequently, the union filed a case in the court, while management opted for lock out. The unions staged a sit-in at factory gate for months in 2009. The interventions by the facilitators ultimately bore fruits and both the parties concerned entered into agreement in May 2009; almost after the lapse of more than two and half years. Ultimately, two agreements were signed; one for the period from 1^st July 2006 to 30^th June 2008 and the second from 1^st July 2008 to 30^th June 2010, table 24.

The firs agreement, however, took up the matter of annual increments. Both the parties agreed for a four-graded increment to be allowed to all permanent workers. The modality worked was: i) one increment w.e.f. 1^st July 2006, ii) one increment w.e.f. 1^st July 2007, iii) one increment w.e.f. 2^nd July 2008, and iv) one increment w.e.f. 30^th December 2008. It is worth mentioning that arrears on account of the above increments to be equally distributed through monthly salary over a period of six years i.e. from June 2009 to May 2015.

 

The agreement also laid down the following general conditions:

• The union agrees to: i) the demand not found in the agreement shall deemed to have be dropped/withdrawn,  ii)  not to make any demand involving financial implication,  iii) extend full cooperation for improvement working, efficiency and production, iv) make all out efforts in enforcing discipline, and v) no work stoppage, strike, interruption or obstacle in dispatches or slow down,
• Workers will continue to enjoy all existing rights, privileges, benefits and facilities already entrusted to them and not mentioned in the agreement, and
• Management reaffirms desire to enhance production capacity of the plant subject to availability of finances and project viability and CBA commits to provide all cooperation for the purpose.

 

The second agreement took up a number of variables for discussion and concluded agreements on many of them. The foremost being the agreement on rise in basic pay; it was increased by 30% increase w.e.f. 1^st July 2008. However, payment of arrears on this account i.e. from 1 July 2008 to July 2009 to be staggered in monthly salary over a period of six years i.e. from June 2009 to May 2015.

 

The union managed to get a rise in a number of benefits as under:

 

·        Canteen shall continue to be run by CBA/workers and its subsidy increased from Rs. 100,000 to Rs. 150,000/annum,

·        Shift Allowance increased from Rs. 9.47/shift to Rs. 12/shift,

·        Widow Pension will be Rs. 5,500/month,

·        Safety equipments to be provided as per law,

·        In addition to the disease/condition for which special medical leave is allowed, the “roadside accident whether inside or outside the factory” also added,

·        The amount under TA/DA raised to Rs. 300/day,

·        In case of utility charges, up to 300 units of electricity made free for those residing in housing colony and Rs. 300/month to other workers.

·        Eid package agreed upon was payment of Rs. 10,000 for ach for the Two Eid festivals,

·        For every 1,000 M Tons of cement production in excess of annual target of 375,000 M Tons, a bonus of two days basic per year as production bonus,

·        No workers will work without uniform and management to provide a uniform form each year including a pair of shoes

·        Time office/Dispatch Office

·        Free of cost transport to needy workers for funeral of blood relatives.

·        A sum of Rs.25,000 out of arrears payable on account of 30% increase in basic pay/special increments shall be paid on marriage of self, son or daughter of the worker, provided that not more than six cases per month will be considered.

 

 

The union agreed that: i) any financial increases/calculations shall be based upon the basic salary of relevant year, ii) it will not make any demand involving financial implication,  iii) it will extend full cooperation for improvement working, efficiency and production, iv) make all out efforts in enforcing discipline, and v) no work stoppage, strike, interruption or obstacle in dispatches or slow down, whatsoever.

 

• Workers will continue to enjoy all existing rights, privileges, benefits and facilities already entrusted to them and not mentioned in the agreement

 

• The management reaffirms desire to enhance production capacity of the plant subject to availability of finances and project viability and CBA commits to provide all cooperation for the purpose.

 

• After this settlement, CBA will withdraw case against the cement company pending in court of law claiming restoration of 30% cut.

 

Table - 24

Salient Features of Collective Bargaining Agreements

Of  Cement Factory after Industrial Action and Conciliation

	Agreement 1	Agreement 2
Date of Charter of Demand Served by the Union	July 2006	July 2008
Date of Charter of Demand Served by the management	NA
Date of agreement and tenure	For two years w.e.f. 1 July 2006 Agreement reached on 9 May 2009	For three years w.e.f. 1 July  2008 Agreement reached on 9 May 2009
Annual Increment	Agreement:  A four-graded increment will be allowed to all permanent workers as: 1) one increment w.e.f. 1st July 2006, 2 ) one increment w.e.f. 1st July 2007, 3) one increment w.e.f. 2nd July 2008, and 4) one increment w.e.f. 30th December 2008. Arrears on account of the above increments will be equally distributed through monthly salary over a period of six years i.e. from June 2009 to May 2015.
Basic Pay	NA	30% increase w.e.f. 1st July 2008 Arrears on  this account i.e. from 1 July 2008 to July 2009 will be equally distributed through monthly salary over a period of six years i.e. from June 2009 to May 2015.
Canteen	NA	Agreement:  Canteen shall continue to be run by CBA/workers and its subsidy increased from Rs. 100,000 to Rs. 150,000/annum
Shift Allowance	NA	Agreement:  Increased from Rs. 9.47/shift to Rs. 12/shift
Widow Pension	NA.	Agreement:  Widow pension will be Rs. 5,500/month
Safety Equipments	NA	Agreement:  Safety equipments shall be provided as per law.
Special Medical Leave	NA	Agreement:  In addition to the disease/condition for which special medical leave is allowed, the “roadside accident whether inside or outside the factory” shall be added.
TA/DA Rules	NA	Agreement:  Amount under TA/DA will be raised to Rs. 300/day
Utility Charges	NA	Agreement:  Up to 300 units of electricity free for those residing in housing colony and Rs. 300/month to other workers.
Time office/Dispatch Office	NA	Agreement: No interference by the CBA and time office will be shifted in side the factory
Eid Package	NA	Agreement: Payment of Rs. 10,000 each for the Two Eids
Production Bonus	NA	Agreement: For every 1,000 M Tons of cement production in excess of annual target of 375,000 M Tons, a bonus of two days basic per year
Uniform	NA	Agreement: No workers will work without uniform and management to provide a uniform form each year including a pair of shoes
Transport for Funeral	NA	Agreement: Free of cost transport to needy workers for funeral of blood relatives.
Marriage	NA	Agreement: A sum of Rs.25,000 out of arrears payable on account of 30% increase in basic pay/special increments shall be paid on marriage of self, son or daughter of the worker, provided that not more than six cases per month will be considered.
Sale of Service	NA	Agreement: A sum of  Rs.500,000 and Rs. 600,000 shall be paid to a worker respectively who opts to surrender claim of his son/nominee in case he  leaves company 2 years  before retirement age i.e at 58 years or at the age of 60 years or less, If a worker reaching retirement age forego his claim for employment of son/nominee, his retirement age will be extended by two years as per existing terms and conditions.
General Conditions	The union agrees to: i) demand not found in the agreement shall deemed to have be dropped/withdrawn,  ii)  not to make any demand involving financial implication,  iii) extend full cooperation for improvement working, efficiency and production, iv) make all out efforts in enforcing discipline, and v) no work stoppage, strike, interruption or obstacle in dispatches or slow down. Workers will continue to enjoy all existing rights, privileges, benefits and facilities already entrusted to them and not mentioned in the agreement. Management reaffirms desire to enhance production capacity of the plant subject to availability of finances and project viability and CBA commits to provide all cooperation for the purpose.	The union agrees to: i) any financial increases/calculations shall be based upon the basic salary of  relevant year,  ii)  not to make any demand involving financial implication,  iii) extend full cooperation for improvement working, efficiency and production, iv) make all out efforts in enforcing discipline, and v) no work stoppage, strike, interruption or obstacle in dispatches or slow down, whatsoever. Workers will continue to enjoy all existing rights, privileges, benefits and facilities already entrusted to them and not mentioned in the agreement. This will be without prejudice to the position of either party in the court of law Management reaffirms desire to enhance production capacity of the plant subject to availability of finances and project viability and CBA commits to provide all cooperation for the purpose. After this settlement, CBA will withdraw case against the cement company pending in court of law claiming restoration of 30% cut.

 

            The review above of collective bargaining agreements do point to the importance of a functioning unionism at plant level in protecting workers’ rights and promoting welfare of working women and men. It is, however, important to point out the “charter of demands” reviewed have largely been conspicuous with absence of unions proposals with regard to raising productivity and enterprise competitiveness. Even the area with regard to enhancing skills of the workers has been found absent in the charter of demand.

 

VIII.     Dispute Settlement

 

The earliest law in the sub-continent for the settlement of industrial disputes was the Employers and Workmen (Disputes) Act 1860 which remained in force till 1929. This enactment provided for the resolution of disputes relating to wages of workers employed in the construction of railways, canals and public works. The disputes were handled by magistrates; however, the Trade Dispute Act 1929 was enacted to meet the requirements arising out of industrial discontentment.

 

The provisions of Trade Dispute Act 1929 were incorporated in the Industrial Disputes Act 1947 after the Second World War. The scheme of the 1947 Act was to provide a hierarchy of machinery for bringing out harmonious relations between employers and workers through work committees, conciliation, boards of conciliation, court of inquiry, failing which settlement was arrived at by adjudication on reference to the ad hoc tribunal.

The Government of Pakistan adopted these labor laws after the independence in 1947. Prior to the partition of India, a five-year program of action was drafted in October 1946 at the Labor Conference which unanimously approved detailed legislative and administrative measures to improve working and living conditions of the workforce. Pakistan’s first Tripartite Labor Conference (PTLC), held in February 1949, approved this program with only minor modifications. The program comprised legislative and administrative measures by the Federal and Provincial Governments, such as: amendments to the Workmen’s Compensation Act, 1923, Factories Act, 1934 and Mines Act 1923 along with new legislation on minimum wages, social security, plantations, shops, commercial establishments, transport services, streamlining machinery of inspection, conciliation and adjudication, provisions of medical and housing services, training organizations, establishing such institutions as employment exchanges and the labor bureau, and the workmen’s state insurance. 

The Industrial Dispute Act of 1947 provided full freedom to workers for collective bargaining. There was a provision in the Act to form work committees to settle disputes between workers and employers in the establishment. An important feature of this Act was the prohibition of strikes and lockouts during conciliation proceedings. The main objective of the Act was to ensure fair terms for workers and prevention of disputes for uninterrupted production. This Act of 1947 also recognized that the workers had rights other than those conferred by the contract of employment. 

 

                                                                                             

The Industrial Disputes Ordinance 1959 being the first major enactment after Pakistan’s ratification of the ILO Conventions 87 and 98 changed the industrial relations system completely to “adjudication oriented” by enlarging the term “public utility service” to include all types of industry. It was made obligatory for the employers employing 50 or more workers to set up a “works committee” in the establishment with equal representation of the workmen to be selected in consultation with the registered trade union to discuss the problems of mutual interest. The conciliation officers were appointed by the Government for conciliating and mediating the industrial disputes. The Ordinance provided for the constitution of one or more industrial courts charged with the responsibility of adjudicating and determining an industrial dispute for which an application was made, inquiring into and adjudicating on any matter referred to it by the Government and trying certain offences under the Ordinance.

 

 

The labor legislation comprising Industrial Dispute Ordinance 1959 later amended by Industrial Disputes Ordinance 1968, the Trade Unions Act 1968, the Industrial and Commercial Employment (Standing Orders) Ordinance, 1968 and, importantly, the IRO-69 regulated the industrial relations system during 1970s. On the one hand the registration of trade unions was made more complex and some control was legally made possible by the Government, the conciliation officers were charged with the duties of mediating and settlement of industrial disputes were given wide powers of inspection and the civil courts were vested with powers to call for the production of documents; on the other hand the Standing Orders legally defined what otherwise would correspond to personnel management practices e.g. the terms of employment, conditions of work and the procedure of handling grievances and discipline.

 

VIII.1  Procedures for Dispute Settlement

 

The IRA-08 as well as its predecessors IRO-69 and IRO-02 laid procedures for the settlement of disputes between the workers and management are discussed in this section.

 

VIII.1.i            Bilateral Negotiations          

If at any time an employer or a CBA finds that an industrial dispute has arisen or is likely to arise, the employer or CBA may communicate respective views to the other party. The works council or the party receiving it shall try to settle the dispute by bilateral negotiation within 15 days or within time period as agreed by the parties. If the parties reach a settlement, a memorandum of settlement is recorded in writing and signed- a copy of the memorandum is forwarded to the conciliator or any other person so authorized by the Provincial government.

 

 If no settlement is reached between the employer and the CBA, either party may within 15 days of the end of the period serve on the other party to the dispute a notice of conciliation. The period of a notice of conciliation is fourteen days.

 

VIII.1.ii          Conciliation

 

The Federal and Provincial Government may appoint as many persons as they consider necessary to act as conciliators. At the federal level conciliators are appointed in such disputes as the NIRC is competent to adjudicate and determine under the Ordinance. The conciliator may invite the employer or any officer of the trade union connected with the dispute to a meeting called by him/her. If the settlement of the dispute or of any matter in dispute is arrived at in the course of the proceedings before the conciliator, he/she is to send a report to the Federal or the Provincial Government together with a memorandum of settlement signed by the parties to the dispute.

 

In case no settlement is arrived at within the period of the notice of strike or lockout, the conciliation proceedings may be continued for such further period as may be agreed upon by the parties. A tripartite Board of Conciliators is to be appointed on the request of the party raising the dispute by the Federal/Provincial Government to conciliate in an industrial dispute involving more than one establishment in a province or in an industry at national level or in an industrial dispute of national importance, if the negotiations are not satisfactorily progressing.

 

 

VIII.1.iii         Arbitration

 

If the conciliation fails, the conciliator would try to persuade the parties to agree to refer the dispute to a mutually agreed arbitrator. In case the parties agree, they are to make a joint request in writing for reference of the dispute to an arbitrator. The arbitrator is to give his/her award within a period of 30 days or such further period as may be agreed upon by the parties to the dispute. The award of the arbitrator is final and valid for a period not exceeding two years or as may be fixed by the arbitrator.

 

VIII.1.iv          Strikes and Lock-outs

If dispute settlement proceedings before the Conciliator fail and no settlement is reached, and if the parties have not agreed to refer their dispute to an arbitrator, the workers retain the right to go on strike provided due notice to their employer is served. However, an employer has also the right to declare a lock-out either after the notice of conciliation is expired or upon a declaration by the conciliator that proceedings have failed. When a strike or lock-out lasts for more than 15 days, the Government, by order in writing, can prohibit the strike or lock-out. A strike or lock-out can also be prohibited at any time before the expiry of 15 days, if Government considers that the continuance of such a strike or lock-out is causing serious hardship to the community or is prejudicial to the national interest or detrimental to the interest of the community at large.

If a strike or lockout occurs within the public utility services sector, the Federal Government and the Provincial Government may, by order in writing, also prohibit its occurrence at any time before or after the commencement of the strike or lockout. No party to an industrial dispute may go on strike or declare a lockout during the course of conciliation or arbitration proceedings, or while proceedings are pending before the Labor Court.

 

 

In case of an illegal strike or lockout, an officer from the Labor Department may make a report to the Labor Court, and require the employer or CBA or the registered trade union concerned, to appear before the Court. The Court may, within 10 days, order the strike or lockout to be stopped. In case of contravention of the order of the Court by the employer, and if the Court is satisfied that the pursuance of the lock-out is causing serious hardship to the community or is prejudicial to the national interest, it may order the attachment of the factory and the appointment of an official receiver, who will exercise the powers of management and may do all such acts as are necessary for conducting business. In case of contravention of the order of the Court by the workers, the Labor Court may pass orders of dismissal against the striking workers, or cancel the registration of the trade union that committed such contravention.

 

VIII.1.v           Labour Courts

 

Any CBA or employer may apply to the Labor Court for the redressal of any grievance or the enforcement of any right guaranteed or secured by or under any law or any award or settlement. The provincial government may, establish as many Labor Courts, as it consider necessary. A labor Court shall:

 

·        Adjudicate and determine an industrial dispute which has been referred to or brought before it under IRA;

·        Enquire into and adjudicate any matter relating to the implementation or violation of a settlement which is referred to it by the Provincial Government;

·        Try offences under IRA and such other offences under any other law as the Provincial Government may, by notification in the official Gazette, specify in this behalf; and exercise and perform such other powers and functions as are or may be conferred upon or assigned it by or under IRA.

 

An award or decision of a Labor Court is to be given in writing and delivered in open Court. Any party aggrieved by an award/ decision may refer an appeal to the Labor Apparent Tribunal.

VIII.1.vi          Labor Appellant Tribunal

This tier that was abandoned by the IRO-02 has to been restored. Hence, appeals against Labor Court decisions are to be made to the Labor Appellant Tribunal.

VIII.1.vii         High Court

The High Court may on appeal, confirm, set aside, vary or modify the award or decision. The decision of the High Court is to be delivered as expeditiously as possible, within a period of sixty days. If in an appeal is referred to it against the order of a Labor Court with regard to the re-instatement of a workman, or compensation, the High Court makes an order staying the operation of the order of the Labor Court. The High Court is to decide such appeal as soon as possible but not later than 60 days.

 

VIII.2              Industrial Disputes and Work Stoppages

        The IRA-08 (as well as its predecessor IRO-02) provides a chain of procedures, as stated above, to be followed for the settlement of industrial disputes. These procedures are intended to avoid stoppage of work as far as possible, and to settle disputes through mutual negotiations, conciliation, arbitration, and labor courts and appellant tribunals. Strike by workers and lock-out by employers are resorted to as measure of last resort. As unions are bound by the provisions of the IRA-08, they try to resolve disputes through mechanisms other than strike.

The limited information available is analyzed here to see how trade unions are working to improve the industrial peace and harmony at workplace. It is interesting to note a decline in the work-days lost in industrial disputes over the period of 1947 to 2001, figures-2 & 3. In recent years, unions and management have been able to resolve the disputes through means other than strikes and lock-outs. The work stoppages (due to strikes and lock-outs) were more frequent in sixties and seventies than in eighties and nineties.

 

Figure-2

Trends in Work Stoppage

Figure-3

 Workers Involved and Man days Lost (in thousands)

Source: Provincial Labour Directorates. *= The figures include strikes & lock-outs.

 

IX.            Tripartism and Social Dialogue

 

Pakistan inherited the concept of Tripartism from the British India. The British India obviously accepted the concept of Tripartism from the ILO following which the Indian Tripartite Labor Conference (ITLC) convened meetings/conferences from time to time. The first ITLC meeting/conference, bringing together the representatives of the employers and workers was held in 1942. Later on, four other Tripartite Labor Conferences were held before independence. The perception of the role of the ITLC was that of a forum for discussion of all matters of importance between employers and employees.

The concept of tripartism was readily recognized and adopted in Pakistan after independence. The Tripartite Conference - now called the Pakistan Tripartite Labor Conference (PTLC) - is considered as an important forum to consult on all matters of national importance between workers and employers as well as on all labor legislative and labor policy issues.

The PTLC, however, have been neither organized regularly nor the mechanism institutionalized. Political expediencies have been found either both in convening and not convening the PTLC, even ignoring.  It is after decades that two PTLCs were convened within a span of eight years. While, both were convened in this decade, the PTLC 2001 was organized with a well prepared agenda and conclusions/recommendations led to eventual formulation of Labor Policy-02 as well as many other follow up actions, see section III.1.v. However, PTLC 2009 was haphazardly organized event evoking criticism both from the employers and workers organizations. Probably, it is first time in the history of PTLC that such an important event had duration of just half-day!

 

 

The observations on the PTLC and especially that convened this year notwithstanding, fact remains that a number of legislations developed do promote tripartite machinery for the regulation and administration of labor issues. The minimum wages boards (MWBs), constituted under the Minimum Wages Ordinance 1961 in the Provinces, consist of an equal number of members representing the Government, the employers and the workers. The Boards are responsible to periodically review and recommend to the Government, after mutual consultations and deliberations, the minimum rates of wages for all or any category of workers in an industry. Currently, in the province of the Punjab, the minimum wages of 51 categories of semi-skilled, skilled and administrative workers are recommended by the MWBs to the Government.

Furthermore, the institutions responsible in the country for administering labor welfare schemes are tripartite in character. The Provincial Employees Social Security Institutions (PESSIs), Employees Old-Age Benefits Institution (EOBI) and Workers Welfare Fund (WWF) have tri-partite governing bodies. Even, the National Vocational Training and Workers’ Education Programs are run by governing bodies or boards of trustees which are tripartite in nature, although the representation of workers and employers on these bodies vis-à-vis those of the Government is not equal.

 

 

This Commission held on extensive survey of the labor scenario in the country by issuing questionnaires to a cross-section of people and meeting representatives of employers, workers and Government throughout the country.

 

Formation of Standing Labor Committee (SLC) at the national level in the year 1981 and a tripartite working group in 1982 followed the NLC. Both these bodies were tripartite in character and issues of national importance concerning workers and employers were referred to them for arriving consensus through mutual consultation. The Standing Committees (SCs) and the Working Groups (WGs) were also consulted by the Government from time to time on amendments in labor laws or new legislations in the area of labor relations and labor welfare.

 

It is, however, to be noted that the SLC, an executive body of the PTLC, having main function as to consider and examine all matters referred to it by the conference or the Government and make its recommendations. The Government prepared a draft Labor Policy in 1989 and referred it to the SLC for a thorough discussion and recommendations. Series of tripartite deliberations were held at the national level on various aspects of the draft Labor Policy.

 

This was the first ever attempt by the Government to bring all the partners of production to the table to thrash out their differences and reach a broad consensus on issues which have been agitating the minds of employers and workers ever since the announcement of labor policy in 1972. These tripartite discussions stretched over one and half year; were fruitful.

 

 

At the provincial level, the Provincial Governments have established tripartite Provincial Labor Boards (PLBs). These Boards review labor related matters in their meetings held from time to time and suggest measures for improvements. At the Provincial level, there are also tripartite workers welfare boards to which funds are provided from the WWF.  The Provincial Welfare Boards deal with the following matters:

·        Construction of houses/flats and development of plots and their allotment to the industrial workers.

·        Provision of funds for different welfare measures for industrial workers, such as: grant of scholarships for post matric studies to two children of each worker, distribution of bicycles free of cost, marriage grants to the workers for the marriage of their daughters, establishment of industrial homes in labor colonies and establishment of Secretariat Training Centers.

·        Holding seminars for imparting education, training and skill to the workers.

·        Any other welfare schemes approved by the Federal Government.

 

Subject to the provision of the Workers’ Welfare Fund Ordinance, 1971, the Provincial Workers’ Welfare Boards have been entrusted with the tasks, such as: allotment and fixation of rent of the houses financed by the WWF, their maintenance and repairs, recovery of the rent and arrears of rent, etc.

 

            The tripartite MWB exist in each province. These Boards determine wages in industries where the workers being a weaker party, find it difficult to bargain their wages and other terms of employment with the employer. In bigger industries, where workers have strong trade unions, wages are determined through the process of collective bargaining. The MWBs comprise the following:

·        One Chairman in each province appointed by the respective Provincial Government.

·        One Independent Member appointed by each Provincial Government but is not connected either with any industry or with employers’ or workers’ organizations.

·        One representative of employers from the respective Province.

·        One representative of the workers from the respective Province.

 

Besides, regular members representing the employers and workers of the province, two additional members, one representing the employers and the other representing the workers of the particular industry, are appointed by the Government whenever any enquiry for recommending minimum wage for workers is undertaken by the Board in respect of such industry. The regular as well as additional members are appointed by the Provincial Government after considering nominations from the respective employers and the workers associations/federations.

A Governing Body has been constituted under Section 5 of the PESS Ordinance, 1965 in each Province. The Ordinance introduces a social security scheme for providing certain benefits to employees and their dependents in the event of sickness, maternity, employment injury or death, etc. The main function of the Governing Body is to approve the budget estimates, the audited accounts and the annual report of the social security institution for submission to the Government and to call for any information or direct any research to be made for the furtherance of the objects of the Ordinance.

 

The Directorate of Workers’ Education under the MOLMOP along with its 12 Centres in different aims at enhancing full and active participation of workers and their organizations in achieving a healthy and constructive industrial atmosphere which would effectively advance social justice, sense of patriotism and particularly increase productivity. The ultimate goal is to assist in contributing policies for the development of trade union education in Pakistan, planning trade union education programs and upgrading the training of qualified instructors in the existing training institutions. A tripartite Joint Advisory Committee of Workers’ Education provides guidance in the establishment of workers’ education centres and education programs.

 

The employees’ old-age benefits scheme was introduced in July 1976 under the Employees Old-Age Benefits Act, 1976. The Act provides for the old-age benefits for the persons employed in industrial, commercial and other organizations. Workers are entitled to pension on fulfilling qualifying conditions after the age of 55. The scheme is managed by the EOBI. The general direction and supervision of the affairs of the EOBI is vested in the Board of Trustees which is of tripartite nature. The Board is empowered to approve the budget estimates, the audited accounts and the annual report of the Institution for submission to the Federal Government. It also has the powers to call for any information or direct any research to be made for the furtherance of the objects of the Act.

 

Tripartite consultative machinery also exists in the area of technical training where National Training Board (NTB) at the national level and the Provincial Training Boards (PTBs) at the provincial levels have been established under a Federal Legislation. These tripartite boards are responsible for monitoring skilled manpower requirements, identifying and inspecting vocational training schemes, ensuring uniformity of training standards, approving training schemes, providing advisory services to establishments and schemes offering vocational training, preparing training plans for the identified manpower required, collaborating with the sources of labour market information for assessing existing and future training needs, studying existing training programs, establishing criteria for evaluating and determining training programs and facilities, developing training syllabi, establishing national training standards and trade tests.

 

 

 

IX.1     Workers Employers Bilateral Council of Pakistan (WEBCOP)

Establishment of an effective link between representatives of employers’ and workers’ organizations indeed has been long the cherished goal of many of the employers and union leaders. A number of employers were of the view that the objective of peaceful industrial relations without active cooperation from workers is impossible to achieve. Unions also realized the fact that workers' prosperity is enshrined in the economic viability and profitability of the enterprise. The need was necessitated further in the wake of a fast globalizing economy where an effective bi-partism - a forum to collectively voice workers’ and employers’ - is raised and policy dialogue is jointly participated. The establishment of the Workers and Employers Bilateral Council of Pakistan (WEBCOP) was realization of the vision of both employers and trade unions; the preparatory work of about a decade culminating on the establishment of WEBCOP in July, 2000 with participation of almost all representative organizations of workers and employers. The memorandum of understanding (MOU) signed by all the parties indicates the importance of mutual cooperation in promoting harmonious industrial relations. Some of the objectives of the WEBCOP are: 

·        Achieving a balance between the rights and obligations of industrial partners,

·        Developing a basis for wage increase in the organized sector without interference in the process of collective bargaining,

·        Promoting productivity and quality improvement efforts at the enterprise and national level in order to fully meet the challenges of globalization and other environmental changes,

·        Improving the quality of life for the working class by establishing a linkage  between the pace of economic development and quantum of social benefits, and

·        Developing, at the enterprise level, effective participative culture through bilateral consultation and dialogue on matters relating to industrial relations, productivity, safety, health, investment, employment and socio-economic benefits.

 

The WEBCOP, in order to achieve the aforesaid objectives, aims to work for : i) activating and extending full support to the tripartite bodies for performing their task efficiently in the best national interest, and ii) importantly, developing an alternate dispute settlement mechanism[14].

 

X.               Conclusions

 

The present study looks into the evolution of the industrial relations system in Pakistan with focus on the legal framework dealing with formation of unions and collective bargaining as well as the role of Government and social partners. It also looks into the dispute settlement mechanism, social dialogue, collective bargaining and tripartism. The study, however, starts with an analysis of key labor market indicators.

 

 

The underutilized labor in Pakistan accounts for a fifth of the workforce and unemployed in number of cases are educated and trained – a scarce commodity in Pakistan, youth and active in the job/work search for a longer period. Lesser remunerative and low productive work currently affects a significant proportion of the employed. The changing work patterns and new forms of employment are more in the direction of making employed more vulnerable. When the “employees” category of employed is looked in terms of employment category – regular, casual, piece rate and apprentice - a rather discomforting situation is observed. Only 56 percent of employees have a “regular” work. The employees having casual work are 27 percent and those engaged on piece rate work are 16 percent.

 

The experience of a large number of developing and even some developed countries has clearly demonstrated that a policy focus on privatization, liberalization and deregulation that is devoid of meaningful consideration on social dimension and participatory environment has failed to address effectively poverty, unemploy­ment and inequality. Indeed, dismantling of the labor protections accompanying greater labor market flexibility with a consequent rise in irregular work are the emerging labor market realities. Layoffs, redundancies, dismissals and job relocations add yet another dimension to the concerns. Thus, the need for a system of bi- and tri-partism well in place is clearly warranted in ensuring social dimension and providing a level playing field to the workers and employers. Indeed, the role of industrial relations in the wake of globalization is getting even more important.  It is, for example, crucial in building consensus on labor market flexibility, employment protection and social security.

 

Respect and implementation of labor rights is funda­mental in creating conditions of work in freedom, dignity, security and equal opportunity for all. The onus of responsibility for securing and implementing these rights lies on both - state and civil society. Engaging in policy dialogue is a dimension increasingly attributed to and taken up by the unions especially in the wake of liberalization, privatization and deregulation; a role now acknowledged for the labor movement.

 

The Constitution of the country has provisions concerning the economic and social well being of the people and for the promotion of social justice. Existing set of laws take care of conditions of work, such as: i) hours of work, ii) rest intervals, iii) weekly holidays, iv) overtime work, and v) annual holidays with pay, etc. Legal provisions also exist concerning minimum age for employment for young workers, dangerous occupations, special provisions for women workers and children, safety; health and hygiene, and welfare of workers in factories. Workers are classified workers into five, namely: i) permanent, ii) probationers, iii) badlis (replacement), iv) temporary, and v) apprentices. The labor laws in Pakistan, it is important to point out, only apply to workplaces employing more than 10 workers and do not recognize those who work less than 180 continuous days per year.

 

The Constitution of the country provides the right to form associations or unions and supports the progress of labor legislation for the benefit of the working men and women. Most of the rights and privileges secured under labor laws are enshrined in the Constitution which stipulates the fundamental rights of the citizens.  The right to association is guaranteed by the Pakistani Constitution; every citizen having the right to form associations or unions, subject to any reasonable restrictions imposed by law in the interest of sovereignty or integrity of Pakistan, public order or morality. Workers as well as employers in any establishment or industry have the right to establish and to join associations of their own choosing, subject to respect of the law.

 

The rules and procedures for the formation of employers’ and workers’ organizations as well as their internal working, collective bargaining and dispute settlement are set out by the IRA-08 (and earlier by its predecessors i.e. IRO-02 and IRO-69). The IRA defines the primary objective of formation of unions as to improve relations between employers and workers and negotiate better terms of employment for their members. The right to form unions, however, is not available to those employed in hospitals, educational institutions, railways (open line), the radio corporation, the security printing press, the defense housing societies, agriculture, export processing zones, ordinance factories, Federal and Provincial Government Service as well as in the informal sector. The Essential Services Ordinance, however, allows public sector employees to form unions and collective bargaining but denies right to strike. 

 

Under the law, there is no limit or restriction on membership for getting certificate of registration for the first union in an establishment. The first union can get registration even with few members. Even, there is no limit on number of workers as members for the registration of second union from a plant/establishment. However, the third union requires membership of 20 percent of the total workforce for the purpose of registration.

 

A union cannot get status of collective bargaining agent until and unless it has more than one third of the total number of workforce employed in such establishment within its fold. If there is more than one union, Registrar has to notify the representative union in the establishment on the basis of secret ballot of members.

 

            The representative character of the trade union in industrial disputes and to obtain representation on committees, boards and commissions is by the appointment of a Collective Bargaining Agent (CBA); a registered trade union elected by secret ballot. The CBAs have the right to formulate and negotiate collective agreements with employers, thus settling terms and conditions of employment, wages and salaries, hours of work, holiday entitlement and pay, etc. Such agreements once duly executed by both parties become the source of law. Various steps set for dispute settlement include: bilateral negotiations, conciliation, voluntary arbitration, works council and adjudication.

 

            A review of collective bargaining agreements do point to the importance of a functioning unionism at plant level protecting workers’ rights and promoting welfare of working women and men. It is, however, important to point out the charter of demands reviewed have largely been conspicuous with absence of unions proposals with regard to raising productivity and enterprise competitiveness. Even the area with regard to enhancing skills of the workers has been found absent in the cheater of demand.

 

Despite inheriting the concept and traditions of Tripartism from the British India, the PTLCs have been convened few and far between. However, a number of legislations promote tripartite machinery for the regulation and administration of labor related institutions and even issues. A tripartite structure/governance is in place for: the Minimum Wage Boards, Employees Social Security Institutions, Employees Old Age Benefit Institution, Workers Welfare Board, Workers Education Directorate and National Training Board. Workers and employers have equal representation. 

 

The role of industrial relations in Pakistan is increasing due to the changing structure of economy with growing share of industrial sector. It is, nevertheless, important to emphasize that Pakistan’s labor movement, still remains splintered along ethnic, sectarian, linguistic and regional lines. Trade union federations are often centered on personalities. Few of them attempt to organize at the grass-roots level and tend to compete for the loyalty of the various enterprise-based unions; thus promoting instability. Over the past 10-15 years, average membership has stabilized at about 135 member per-union, down from nearly 2,000 immediately after independence. Union dues are not paid in many instances; hence incomes of trade unions are low. This seriously affects their activities and services to members and creates dependence on external funding for their trade union work.

 

            Many unions operate at a plant or in an establishment but at the cost of absence of any representation of workers organizations in a large number of establishments. This Multiplicity of the unions can be gauged by the fact that while there are over 7,200 registered unions, the CBAs are only 1,905 i.e. 26 percent of these registered unions!   

 

            Despite such a sorry state of affairs, the redeeming feature nevertheless is the presence of labor movement across industry – manufacturing, services and even in local government/civic bodies. 

 

The labor movement is confronted with internal problems as well. Trade unions are plagued with leadership rivalries, evolving around personalities, fragmentation and division. Trade union federations are often centered on personalities. Current membership of about 135 members per union - down from nearly 2,000 immediately after independence – with over 7,200 trade unions indeed speak of the deep divisions. Union dues are largely not paid in many instances; hence low incomes of trade unions adversely affect their trade union work and importantly in developing necessary capacities needed for social and policy dialogue. These observations notwithstanding, the successful completion of merger process of the three mainstream national centers and formation of Pakistan Workers Federation in September 2005 is an important step towards the realization of one voice of working men and women in Pakistan. The greater participation of the mainstream trade unions in the WEBCOP also demonstrates increasing realization of the leadership – both employers and trade unions - with regard to the role and need for bilateralism. This needs to be strengthened and institutionalized at local level. The WECOP also needs to increasingly address itself with the task of dispute settlement.

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