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Future roadmap of industrial relations: comparative analysis of IRO 1969, IRO 2002 and IRA 2008
FASIHUL KARIM SIDDIQI
January 17 2009
ARTICLE :Alongside are excerpts from the writer's speech that he delivered at "National Industrial Relations Conference" on January 14, 2009 at Karachi. The Prime Minister of Pakistan, in his first speech in the Parliament after formation of the democratically elected government, announced his government's decision to replace IRO 2002 by IRO 1969 declaring IRO 2002 as anti-union.
Later, while placing the Bill before the Parliament, for the repeal of IRO-2002 and enactment of Industrial Relations Act 2008, the following four objectives were mentioned in the statement of objects and reasons:
i.) to regulate the Government's vision on dignity of labour, elimination of animosity and antagonism by fostering a trust-relationship between employers and employees and promoting social dialogue in the law.
ii.) to give right of association to the workers employed in Railways on MOD lines, Pakistan Mint, and in any institution established for payment of employees' old-age pensions or for workers' welfare.
iii.) to provide free discretion to the trade unions to join or not to join any federation or confederation, of their own choice;
iv.) to revive the Labour Appellate Tribunals on persistent demand of trade unions/federation in order to ensure speedy disposal of labour disputes. In order to truly appraise whether or not the objectives have been achieved, I first take the opportunity of presenting before this conference a comparative analysis of the IRO-69, IRO-2002 and IRA-2008 and then throw some light on the current scenario of industrial relations and the future IR roadmap which this conference may consider:
THE COMPARISON IS BEING PRESENTED BY PICKING 15 MAJOR AREAS/ISSUES CONCERNING INDUSTRIAL RELATIONS ADDRESSED IN THE THREE SUCCESSIVE LEGISLATIONS AS UNDER:
i. PREAMBLE: From the preamble of three laws it can be gathered that unlike the previous law of IRO-69 which consolidated the law relating to the formation of trade union and regulated relations between employers and workers and the law of IRO 2002 which aimed to rationalise the law relating to formation of trade union and the regulation and improvement of relations between employers and workers, the IRA 2008 aims at improvement of relations between employers and workers. To what extent the new act achieves this purpose needs an understanding of the comparison that follows.
ii. APPLICABILITY OF THE IRO: The IROs in Section One define its applicability by excluding from under their purview of application persons employed in certain categories: All the three IROs unanimously excluded the law's application to persons employed in:
(a) Police or Defence services or in an any installation of the armed forces.
(b) Administration of state other than those employed by Railways, Post and Telegraph Department, employees of Telegraph Department were excluded from IRO 1969 and 2002 since they were under public sector but have now been covered by IRA 2008 since telephone department has been privatised.
(c) Employees of Pakistan Security Printing Corporation or Security Papers Limited, Watch and Ward Security or fire service of oil refinery, production, transmission or distribution of petroleum gas or LPG.
(d) Employees of hospitals have been exempted from all the three ordinances but both 02 and 08 IROs cover employees of hospitals run on commercial basis.
(e) IRO-69 excluded employees of PTV and PBC and also suspended application of ordinance to any person employed in PIAC. It may therefore be true to say that IRO 69 was also anti-union from this perspective alone.
Following this precedent, IRO 2002 excluded from application of the Ordinance employees of EOBI and contained a provision that Federal Government reserved the right to suspend IRO's application to any establishment for 6 months in the name of public interest. In fact this was the provision which gave unfettered right to government to ban trade Union in any organisation and met the most criticism.
iii. DEFINITIONS:Some of the vital definitions affected are those of employers, establishment, industry, trade union and workmen. A new debate on whether a supervisor is a worker or an employer in view of changing definitions will arise. Widened definitions of establishment and industry, given in IRO 2002 have been retained in IRA 2008.
The definition of "trade union" in IRA 2002 requiring federation at the national level to comprise at least ten or more CBAs which aimed at curbing the mushroom growth of national federations has been done away with.
iv. TRADE UNION AND FREEDOM OF ASSOCIATION:SECTION 3: in all the three IRO's are the most vital section concerning the incorporation of the provisions of ILO Conventions No 87 and 98 relating to Freedom of Association and Collective Bargaining and has unfortunately received the worst treatment and consideration in all the three legislations one after the other;
a IRO 69 provides the Freedom of Association by stating in Section 3(a&b) that workers and employers without distinction shall have the right to establish and subject only be the rules of the organisation concerned, to join associations of their own choice.
b IRO 2002 which claims to rationalise the formation of trade Union in Sec 3 (a) provides that workers shall have the right to form or join any "trade union of their choice while employers shall have the right to form or join any "association" of their choice.
c IRA 2008 in Section 3(a&b) provides that both workers and employers shall have the right to establish and, subject to the rules of the organisations concerned, join "international association" of their own choice. The problem with all the three legislations is that none of them defines the term "association", although the term organisation has been defined by all the three IROs.
Moreover Article 2 of the ILO Convention No 87 has used the term "organisation" and not "association". The IRA 2008 creates a situation worst confounded by giving the freedom to workers and employers to establish and join "international association" subject to rules of the organisation.
Even if it is conceded that a trade Union in its organisation may not have any restriction to allow their members to join "international" associations but I want to ask why an enterprise or an employers' organisation may not put a restriction on their workers to join an international association and how that will not make the laws claim of providing unfettered freedom of association questionable. I also fail to comprehend the wisdom of the drafters of laws for such a provision which at the very face may be seen as "anti-union".
v. ADHERENCE TO THE LAW OF THE LAND: Both the IRO69 in Sec 4 and IRO2002 in Sec 3(2) provides that workers and employers and their respective organisations in exercising the right provided in Section 3 shall respect the law of the land.
IR Act 2008 completely eliminates this clause which not only makes workers and employers organisation above and beyond the law of land while exercising their rights. This is also a violation of article 8(1) of the ILO Convention No 87 which specially requires workers and employers and their organisations to respect the law of the land.
If the provision in Section 3 of IR Act of allowing workers and employers to join "international" associations is seen in this perspective, then the issues which implementation of the IRA may create in the country is anybody's guess and is beyond the wisdom to conceive, if this provision is "pro- or anti-union".
vi. Curbing mushroom growth of trade unions at the enterprise level.
a. Sec 72(b) of IRO-69 provided that a trade union shall not be entitled to registration unless it has as its members not less than one-fifth of the total number of workers.
To curb mushroom growth of trade Union at the enterprise level, sec 6.2 (b) of IRO 2002 provided that a trade Union seeking registration must have a membership of not less than one-fourth of the total number of workers. This was a positive clause but although IRA 2008 has retained some positive clauses of IRO 2008, this clause was reversed to 69 position with what wisdom needs a guess.
b. Similarly the Registrar under Sec. 12(3) of IRO2002 could cancel the registration of dormant trade unions such as those which had not contested a referendum or served less than 15% of votes but these provisions have also been undone.
c. To curb mushroom growth of fake federations (of both employers and workers), IRO-2002 made it compulsory in case of registration for a national federation to have more than ten trade Unions (at least one from each province) as its member and forbade them to have similar or identical name. This again was a positive clause but has been undone by IRA 2008.
vii. UNFAIR LABOUR PRACTICE: All the three IROs have provided a list of "don'ts" to be strictly observed by employers and workers to ensure smooth labour relations at the enterprise level without undue interference from either parties.
Based on the worst experiences of the 70's and 80's, the IRO 2002 in Section 64 also declared among others, the acts of (a) compelling any member of a body concerning the functions of an industry to accept any demand by using coercion, pressure, threat, force or ouster from a place, assault, physical injury etc and (b) carrying arms or weapons within the premises of an employer without any legal authority also as an unfair labour practice on the part of the workers. This has been expressly taken out of the list in IRA Act 2008 - with what intentions is a serious question mark in the minds of the employers.
viii. COLLECTIVE BARGAINING AGENT:
a. IRO 2002 determined the duration of a CBA once certified to be three years which aimed at ensuring enterprise level industrial stability but IRA 2008 has reversed the duration period to two years.
b. IRO 2002 in Section 20 provided that no employer shall transfer, remove, retrench, or terminate any worker who is office bearer of a contestant trade union save with permission of Registrar after an application for determining CBA has been made. This clause has been undone by IRA but with what wisdom. Was this an anti-union clause is left to be answered.
c. When a CBA has not been determined in an organisation as per the law, Section 22 of IRO 2002 provided a clause whereby a registered trade union recognised by the employer could perform CBA functions to fill the vacuum in the interim period. This also was a positive clause but removed by the IRA 2008 without suggesting an alternative solution.
ix WORKERS' PARTICIPATION IN MANAGEMENT: IRO 69 was seriously criticised for providing 5 institutions at the plant level (CBA, Shop Stewards, Management Committee, Joint Management Board and Works Council) to improve bilateral relations each having overlapping functions with the result that except for the CBA none of the other institutions could practically work to ensure workers' participation in management and instead produced a "big group of non working workers" at the enterprise level in the name of workers participation in management.
To ensure effective participation of workers in factory management and reduce multiplicity of institutions at the bilateral level, it was agreed in IRO 2002 with consensus to merge the three institutions - the management committee, joint management board, and works council into one institution under the name of joint works council.
Before this institution could be strengthened at the enterprise level the IRA-2008 has reversed and restored the multitude of enterprise level institutions as provided in erstwhile IRO-69 with what results is left for anybody's guess.
x DISPUTE RESOLUTION PROCESS: IRO 2002 from Section 25 to 31 provides a dispute resolution process whereby party raising an industrial dispute and bilateral parties involved in negotiations are given sufficient impetus and time to resolve their differences and reach a settlement before ultimately resorting to using the final and ultimate tool of strike or lockout.
This was unlike the process given in IRO 69 which provided parties to serve notice of strike or lockout almost immediately after raising dispute at the very first stage of failure of negotiation. Instead of appreciating the wisdom of such an approach IRA 2008 restores the old, conservative process given in IRO 69.
Is the government or the workers in any disadvantage if the conciliatory approach and the process of negotiation encouraged as a tool through steps like notice of conciliation or formation of Tripartite Conciliation Board are issues which need serious review.
xi LABOUR APPELLATE TRIBUNAL: Restoration of Labour Appellate Tribunal as Court of Appeal against decision of Labour Court is a welcome step if its replacement by High Court as the first Court of Appeal provided IRO 2002 was not a wise step.
xii WAGE COMMISSION: The provision of Wage Commission given in Section 38(A) to 38 (I) of IRO 1969 has not been restored in IRA 2008 and is a wise action. From employers' perspective, it also advisable to suggest that different sectors of industry should not be governed by different procedures in law for the purpose of wages or increase in wages determination and the right of collective bargaining should not be restricted by forming Wage Commission or Bank Commission.
xii DURATION OF SETTLEMENT: Both IROs 1969 and 2002 placed no restriction on the mutually agreed period between parties for duration of a settlement.
IRO-2002 however provided in Section 60 that if no period is agreed upon, the settlement will be binding for two years instead of one year as originally provided in IRO-69 Section 87 of the IRA-2008 suggests a unique thing - the parties, even with mutual agreement cannot keep a settlement binding on themselves for not more than two years and that if no period is agreed, a settlement shall not be for a period of more than one year.
Does this not amount to putting undue restriction on mutual agreement between willing parties in the interest of enterprise peace and sustainability, and does any such restrictive clause in law not jeopardise a stable labour-management relations at the enterprise level?
xiii PUNISHMENT IN CASE OF PENALTY: IRA 2008 by not reversing the provision of IRO 2002 where punishment of imprisonment converted into enhanced fine has justifiably accepted the principle of respecting the dignity of both workers and employers recognising their contribution to industrial peace and progress and is surely a wise decision.
xv CODE OF CONDUCT AND DEFINING RIGHTS AND OBLIGATIONS: For the first time in history with complete consensus of employers and workers, IRO 2002 in Section 83 provided a specific clause regarding observance of workers and employers reciprocal rights and obligations and Schedule II of IRO listed the rights and duties of workers and employers which could be termed as "Code of Conduct" to improve relations between employers and workers.
This hard work of both employers and workers in reaching a consensus on "Code of Conduct" and commitment of its mutual observance has been thrown to the drain by a stroke of amendment in IRA 2008 which has straight away struck down this provision without giving any justification.
Could these by provisions, by any stretch of imagination be considered as "anti-union" so strong enough that the first opportunity of amending the law that in the first opportunity, they should have been eliminated causing serious frustration and agitation at least in the minds of the employers and the entire business community.
THE CURRENT SCENARIO Having presented the comparative analysis of the three successive laws on industrial relations, a quick view of the current industrial relations scenario with an overview of the five labour policies and the political, economic and social context in which they were framed will not be out of context here.
i. The first labour policy of 1955 was given by a democratic government with a view to lay down the foundation of a welfare state with emphasis on building the country's industrial base. The employers were expected to play the "paternalistic" role and develop an enterprise-based employer and employee relationship built on trust and respect for labour as supporting partners in industrial growth.
The policy however could not even see the light of the day as within a year of its announcement the country was gripped in the worst constitutional crisis of its history leading to the imposition of the first Martial Law in 1958.
ii. The second labour policy of 1959 announced by the first Martial Law regime and later pursued by the quasi-democratic regime coming into existence as a result of the new constitution of Pakistan in 1962 establishing presidential system of Government aimed to establish industrial peace by persuading both the employers and workers to resort to legal means. The policy which was called legalistic in nature became victim of bureaucratic details untimely resulting in generating massive labour unrest.
iii. Both the first and second labour policies were tilted towards the employers and the employees had the golden chance to win the heart of the workers by embracing social justice as a part of their economic agenda.
Unfortunately the first generation of employers were yet to grow an entrepreneurial outlook and because of their trading approach, they failed to use this opportunity of over two decades for building up the desirable level of trust as the foundation of enterprise-based industrial relation system and even some unscrupulous employers used the lapses of some unscrupulous employers labour laws in exploiting workers by forming pocket unions and other measures of suppressing trade unionism resulting in a collapse of complete trust.
iv. The third labour policy of Bhutto, in contrast to the preceding two labour policies, championed the cause of the workers, gave them voice they never had before and was heavily tilted towards workers so much so that it generated a confrontational industrial atmosphere instead of achieving the much-claimed objectives of harmony.
This was a golden opportunity for workers and the trade union leadership to show maturity and use their wisdom unprecedented powers to exert their influence in forging an atmosphere of trust in the impaired industrial relationship at the enterprise level.
This opportunity was lost and instead the workers being largely illiterate, some of the disgruntled so-called "outside" labour leaders - used their unfiltered rights to outblow the situation resulting in a number of enterprises closing down causing considerable blow to the process of industrialisation and private investment in the country.
v In this background the period of thirty years between 1977 - 2002 during which governments in succession showed no hurry to come up with a labour policy proved to be a blessing in disguise.
By so doing the governments made the employers and workers realise that they have to find a way to live together by reading the writing on the wall that both must develop a climate of mutual understanding to coexist instead of depending on the government to put its weight on one or the other side to imbalance the relationship.
It was a result of this scenario that the progressive enlightened employers and senior, sincere, patriotic and serious trade union leaders of national stature put their heads together and at the initiative of the Employers Federation of Pakistan formed the Workers - Employers Bilateral Council of Pakistan (WEBCOP) as a joint forum where the controversial issues between employers and worker could be discussed at the bilateral level prior to taking up positions before the Government in the tripartite settings.
vi This development brought a unique wave of change in the overall national industrial relations atmosphere and was duly recognised by the government as a highly supporting model for building the structure of a new relationship of mutual trust among the two most active partners of economic and social growth.
It was obviously a result of this development that the fifth labour policy was a consensus document which if implemented in its letter and in spirit could pave the way for much- needed harmony in social and economic integration.
vii Unfortunately this dream was shattered and the Industrial Relations Ordinance 2002 which was implemented soon after the announcement of the fifth labour policy clearly demonstrated that the government and its bureaucratic elements did not desire to take advantage of the growing consensus among the social partners and instead much against the will of the employers and workers, seeds of discord were sown by government when it withdrew the right of freedom of association from many enterprises in the new law.
This brought both workers and their leadership once again at the point of agitation and workers demands that IRO 2002 be withdrawn. The new democratic government which came into power in 2008, has on 8th November 2008 enacted the new Industrial Relations Act 2008 which in effect is a restoration of the IRO-1969 on the premise that the IRO 2002 was anti-union and had to be undone in keeping with the democratic government's political manifesto to support the workers' rights.
In the process, however, whatever good was achieved by employers and workers with mutual consensus and contained in the IRO-2002 was also undone. To what extent IRO 69 and/or IRO 2002 are or are not anti-union needs to be dispassionately viewed in the light of comparative analysis.
The Government has termed this an interim measure and has promised that new legislation will be bought within a period of 18 months after intensive tripartite consultations among social partners during this period. The industrial relations system in Pakistan is once again standing at the debris of history even after its sixty years of existence to get a new start, a new shape and a new structure.
Let us pray and ensure that our industrial relations system be not dragged under the clouds of the 70s and the 80s which will be dubbed by historians as the worst phase of industrial relations blocking the country's industrial, economic and social progress.
Let us not take any step while remaining within our senses of putting the clock of progress thirty years behind in history which act may plunge the country into a state of total economic and social sinkage. Time is still not completely out. Let this be hoped that this opportunity of new social dialogue augur well for defining the pattern of social progress and social justice in the new millennium.
(The writer is Director, Hinopak Motors Limited)
FASIHUL KARIM SIDDIQI
January 17 2009
ARTICLE :Alongside are excerpts from the writer's speech that he delivered at "National Industrial Relations Conference" on January 14, 2009 at Karachi. The Prime Minister of Pakistan, in his first speech in the Parliament after formation of the democratically elected government, announced his government's decision to replace IRO 2002 by IRO 1969 declaring IRO 2002 as anti-union.
Later, while placing the Bill before the Parliament, for the repeal of IRO-2002 and enactment of Industrial Relations Act 2008, the following four objectives were mentioned in the statement of objects and reasons:
i.) to regulate the Government's vision on dignity of labour, elimination of animosity and antagonism by fostering a trust-relationship between employers and employees and promoting social dialogue in the law.
ii.) to give right of association to the workers employed in Railways on MOD lines, Pakistan Mint, and in any institution established for payment of employees' old-age pensions or for workers' welfare.
iii.) to provide free discretion to the trade unions to join or not to join any federation or confederation, of their own choice;
iv.) to revive the Labour Appellate Tribunals on persistent demand of trade unions/federation in order to ensure speedy disposal of labour disputes. In order to truly appraise whether or not the objectives have been achieved, I first take the opportunity of presenting before this conference a comparative analysis of the IRO-69, IRO-2002 and IRA-2008 and then throw some light on the current scenario of industrial relations and the future IR roadmap which this conference may consider:
THE COMPARISON IS BEING PRESENTED BY PICKING 15 MAJOR AREAS/ISSUES CONCERNING INDUSTRIAL RELATIONS ADDRESSED IN THE THREE SUCCESSIVE LEGISLATIONS AS UNDER:
i. PREAMBLE: From the preamble of three laws it can be gathered that unlike the previous law of IRO-69 which consolidated the law relating to the formation of trade union and regulated relations between employers and workers and the law of IRO 2002 which aimed to rationalise the law relating to formation of trade union and the regulation and improvement of relations between employers and workers, the IRA 2008 aims at improvement of relations between employers and workers. To what extent the new act achieves this purpose needs an understanding of the comparison that follows.
ii. APPLICABILITY OF THE IRO: The IROs in Section One define its applicability by excluding from under their purview of application persons employed in certain categories: All the three IROs unanimously excluded the law's application to persons employed in:
(a) Police or Defence services or in an any installation of the armed forces.
(b) Administration of state other than those employed by Railways, Post and Telegraph Department, employees of Telegraph Department were excluded from IRO 1969 and 2002 since they were under public sector but have now been covered by IRA 2008 since telephone department has been privatised.
(c) Employees of Pakistan Security Printing Corporation or Security Papers Limited, Watch and Ward Security or fire service of oil refinery, production, transmission or distribution of petroleum gas or LPG.
(d) Employees of hospitals have been exempted from all the three ordinances but both 02 and 08 IROs cover employees of hospitals run on commercial basis.
(e) IRO-69 excluded employees of PTV and PBC and also suspended application of ordinance to any person employed in PIAC. It may therefore be true to say that IRO 69 was also anti-union from this perspective alone.
Following this precedent, IRO 2002 excluded from application of the Ordinance employees of EOBI and contained a provision that Federal Government reserved the right to suspend IRO's application to any establishment for 6 months in the name of public interest. In fact this was the provision which gave unfettered right to government to ban trade Union in any organisation and met the most criticism.
iii. DEFINITIONS:Some of the vital definitions affected are those of employers, establishment, industry, trade union and workmen. A new debate on whether a supervisor is a worker or an employer in view of changing definitions will arise. Widened definitions of establishment and industry, given in IRO 2002 have been retained in IRA 2008.
The definition of "trade union" in IRA 2002 requiring federation at the national level to comprise at least ten or more CBAs which aimed at curbing the mushroom growth of national federations has been done away with.
iv. TRADE UNION AND FREEDOM OF ASSOCIATION:SECTION 3: in all the three IRO's are the most vital section concerning the incorporation of the provisions of ILO Conventions No 87 and 98 relating to Freedom of Association and Collective Bargaining and has unfortunately received the worst treatment and consideration in all the three legislations one after the other;
a IRO 69 provides the Freedom of Association by stating in Section 3(a&b) that workers and employers without distinction shall have the right to establish and subject only be the rules of the organisation concerned, to join associations of their own choice.
b IRO 2002 which claims to rationalise the formation of trade Union in Sec 3 (a) provides that workers shall have the right to form or join any "trade union of their choice while employers shall have the right to form or join any "association" of their choice.
c IRA 2008 in Section 3(a&b) provides that both workers and employers shall have the right to establish and, subject to the rules of the organisations concerned, join "international association" of their own choice. The problem with all the three legislations is that none of them defines the term "association", although the term organisation has been defined by all the three IROs.
Moreover Article 2 of the ILO Convention No 87 has used the term "organisation" and not "association". The IRA 2008 creates a situation worst confounded by giving the freedom to workers and employers to establish and join "international association" subject to rules of the organisation.
Even if it is conceded that a trade Union in its organisation may not have any restriction to allow their members to join "international" associations but I want to ask why an enterprise or an employers' organisation may not put a restriction on their workers to join an international association and how that will not make the laws claim of providing unfettered freedom of association questionable. I also fail to comprehend the wisdom of the drafters of laws for such a provision which at the very face may be seen as "anti-union".
v. ADHERENCE TO THE LAW OF THE LAND: Both the IRO69 in Sec 4 and IRO2002 in Sec 3(2) provides that workers and employers and their respective organisations in exercising the right provided in Section 3 shall respect the law of the land.
IR Act 2008 completely eliminates this clause which not only makes workers and employers organisation above and beyond the law of land while exercising their rights. This is also a violation of article 8(1) of the ILO Convention No 87 which specially requires workers and employers and their organisations to respect the law of the land.
If the provision in Section 3 of IR Act of allowing workers and employers to join "international" associations is seen in this perspective, then the issues which implementation of the IRA may create in the country is anybody's guess and is beyond the wisdom to conceive, if this provision is "pro- or anti-union".
vi. Curbing mushroom growth of trade unions at the enterprise level.
a. Sec 72(b) of IRO-69 provided that a trade union shall not be entitled to registration unless it has as its members not less than one-fifth of the total number of workers.
To curb mushroom growth of trade Union at the enterprise level, sec 6.2 (b) of IRO 2002 provided that a trade Union seeking registration must have a membership of not less than one-fourth of the total number of workers. This was a positive clause but although IRA 2008 has retained some positive clauses of IRO 2008, this clause was reversed to 69 position with what wisdom needs a guess.
b. Similarly the Registrar under Sec. 12(3) of IRO2002 could cancel the registration of dormant trade unions such as those which had not contested a referendum or served less than 15% of votes but these provisions have also been undone.
c. To curb mushroom growth of fake federations (of both employers and workers), IRO-2002 made it compulsory in case of registration for a national federation to have more than ten trade Unions (at least one from each province) as its member and forbade them to have similar or identical name. This again was a positive clause but has been undone by IRA 2008.
vii. UNFAIR LABOUR PRACTICE: All the three IROs have provided a list of "don'ts" to be strictly observed by employers and workers to ensure smooth labour relations at the enterprise level without undue interference from either parties.
Based on the worst experiences of the 70's and 80's, the IRO 2002 in Section 64 also declared among others, the acts of (a) compelling any member of a body concerning the functions of an industry to accept any demand by using coercion, pressure, threat, force or ouster from a place, assault, physical injury etc and (b) carrying arms or weapons within the premises of an employer without any legal authority also as an unfair labour practice on the part of the workers. This has been expressly taken out of the list in IRA Act 2008 - with what intentions is a serious question mark in the minds of the employers.
viii. COLLECTIVE BARGAINING AGENT:
a. IRO 2002 determined the duration of a CBA once certified to be three years which aimed at ensuring enterprise level industrial stability but IRA 2008 has reversed the duration period to two years.
b. IRO 2002 in Section 20 provided that no employer shall transfer, remove, retrench, or terminate any worker who is office bearer of a contestant trade union save with permission of Registrar after an application for determining CBA has been made. This clause has been undone by IRA but with what wisdom. Was this an anti-union clause is left to be answered.
c. When a CBA has not been determined in an organisation as per the law, Section 22 of IRO 2002 provided a clause whereby a registered trade union recognised by the employer could perform CBA functions to fill the vacuum in the interim period. This also was a positive clause but removed by the IRA 2008 without suggesting an alternative solution.
ix WORKERS' PARTICIPATION IN MANAGEMENT: IRO 69 was seriously criticised for providing 5 institutions at the plant level (CBA, Shop Stewards, Management Committee, Joint Management Board and Works Council) to improve bilateral relations each having overlapping functions with the result that except for the CBA none of the other institutions could practically work to ensure workers' participation in management and instead produced a "big group of non working workers" at the enterprise level in the name of workers participation in management.
To ensure effective participation of workers in factory management and reduce multiplicity of institutions at the bilateral level, it was agreed in IRO 2002 with consensus to merge the three institutions - the management committee, joint management board, and works council into one institution under the name of joint works council.
Before this institution could be strengthened at the enterprise level the IRA-2008 has reversed and restored the multitude of enterprise level institutions as provided in erstwhile IRO-69 with what results is left for anybody's guess.
x DISPUTE RESOLUTION PROCESS: IRO 2002 from Section 25 to 31 provides a dispute resolution process whereby party raising an industrial dispute and bilateral parties involved in negotiations are given sufficient impetus and time to resolve their differences and reach a settlement before ultimately resorting to using the final and ultimate tool of strike or lockout.
This was unlike the process given in IRO 69 which provided parties to serve notice of strike or lockout almost immediately after raising dispute at the very first stage of failure of negotiation. Instead of appreciating the wisdom of such an approach IRA 2008 restores the old, conservative process given in IRO 69.
Is the government or the workers in any disadvantage if the conciliatory approach and the process of negotiation encouraged as a tool through steps like notice of conciliation or formation of Tripartite Conciliation Board are issues which need serious review.
xi LABOUR APPELLATE TRIBUNAL: Restoration of Labour Appellate Tribunal as Court of Appeal against decision of Labour Court is a welcome step if its replacement by High Court as the first Court of Appeal provided IRO 2002 was not a wise step.
xii WAGE COMMISSION: The provision of Wage Commission given in Section 38(A) to 38 (I) of IRO 1969 has not been restored in IRA 2008 and is a wise action. From employers' perspective, it also advisable to suggest that different sectors of industry should not be governed by different procedures in law for the purpose of wages or increase in wages determination and the right of collective bargaining should not be restricted by forming Wage Commission or Bank Commission.
xii DURATION OF SETTLEMENT: Both IROs 1969 and 2002 placed no restriction on the mutually agreed period between parties for duration of a settlement.
IRO-2002 however provided in Section 60 that if no period is agreed upon, the settlement will be binding for two years instead of one year as originally provided in IRO-69 Section 87 of the IRA-2008 suggests a unique thing - the parties, even with mutual agreement cannot keep a settlement binding on themselves for not more than two years and that if no period is agreed, a settlement shall not be for a period of more than one year.
Does this not amount to putting undue restriction on mutual agreement between willing parties in the interest of enterprise peace and sustainability, and does any such restrictive clause in law not jeopardise a stable labour-management relations at the enterprise level?
xiii PUNISHMENT IN CASE OF PENALTY: IRA 2008 by not reversing the provision of IRO 2002 where punishment of imprisonment converted into enhanced fine has justifiably accepted the principle of respecting the dignity of both workers and employers recognising their contribution to industrial peace and progress and is surely a wise decision.
xv CODE OF CONDUCT AND DEFINING RIGHTS AND OBLIGATIONS: For the first time in history with complete consensus of employers and workers, IRO 2002 in Section 83 provided a specific clause regarding observance of workers and employers reciprocal rights and obligations and Schedule II of IRO listed the rights and duties of workers and employers which could be termed as "Code of Conduct" to improve relations between employers and workers.
This hard work of both employers and workers in reaching a consensus on "Code of Conduct" and commitment of its mutual observance has been thrown to the drain by a stroke of amendment in IRA 2008 which has straight away struck down this provision without giving any justification.
Could these by provisions, by any stretch of imagination be considered as "anti-union" so strong enough that the first opportunity of amending the law that in the first opportunity, they should have been eliminated causing serious frustration and agitation at least in the minds of the employers and the entire business community.
THE CURRENT SCENARIO Having presented the comparative analysis of the three successive laws on industrial relations, a quick view of the current industrial relations scenario with an overview of the five labour policies and the political, economic and social context in which they were framed will not be out of context here.
i. The first labour policy of 1955 was given by a democratic government with a view to lay down the foundation of a welfare state with emphasis on building the country's industrial base. The employers were expected to play the "paternalistic" role and develop an enterprise-based employer and employee relationship built on trust and respect for labour as supporting partners in industrial growth.
The policy however could not even see the light of the day as within a year of its announcement the country was gripped in the worst constitutional crisis of its history leading to the imposition of the first Martial Law in 1958.
ii. The second labour policy of 1959 announced by the first Martial Law regime and later pursued by the quasi-democratic regime coming into existence as a result of the new constitution of Pakistan in 1962 establishing presidential system of Government aimed to establish industrial peace by persuading both the employers and workers to resort to legal means. The policy which was called legalistic in nature became victim of bureaucratic details untimely resulting in generating massive labour unrest.
iii. Both the first and second labour policies were tilted towards the employers and the employees had the golden chance to win the heart of the workers by embracing social justice as a part of their economic agenda.
Unfortunately the first generation of employers were yet to grow an entrepreneurial outlook and because of their trading approach, they failed to use this opportunity of over two decades for building up the desirable level of trust as the foundation of enterprise-based industrial relation system and even some unscrupulous employers used the lapses of some unscrupulous employers labour laws in exploiting workers by forming pocket unions and other measures of suppressing trade unionism resulting in a collapse of complete trust.
iv. The third labour policy of Bhutto, in contrast to the preceding two labour policies, championed the cause of the workers, gave them voice they never had before and was heavily tilted towards workers so much so that it generated a confrontational industrial atmosphere instead of achieving the much-claimed objectives of harmony.
This was a golden opportunity for workers and the trade union leadership to show maturity and use their wisdom unprecedented powers to exert their influence in forging an atmosphere of trust in the impaired industrial relationship at the enterprise level.
This opportunity was lost and instead the workers being largely illiterate, some of the disgruntled so-called "outside" labour leaders - used their unfiltered rights to outblow the situation resulting in a number of enterprises closing down causing considerable blow to the process of industrialisation and private investment in the country.
v In this background the period of thirty years between 1977 - 2002 during which governments in succession showed no hurry to come up with a labour policy proved to be a blessing in disguise.
By so doing the governments made the employers and workers realise that they have to find a way to live together by reading the writing on the wall that both must develop a climate of mutual understanding to coexist instead of depending on the government to put its weight on one or the other side to imbalance the relationship.
It was a result of this scenario that the progressive enlightened employers and senior, sincere, patriotic and serious trade union leaders of national stature put their heads together and at the initiative of the Employers Federation of Pakistan formed the Workers - Employers Bilateral Council of Pakistan (WEBCOP) as a joint forum where the controversial issues between employers and worker could be discussed at the bilateral level prior to taking up positions before the Government in the tripartite settings.
vi This development brought a unique wave of change in the overall national industrial relations atmosphere and was duly recognised by the government as a highly supporting model for building the structure of a new relationship of mutual trust among the two most active partners of economic and social growth.
It was obviously a result of this development that the fifth labour policy was a consensus document which if implemented in its letter and in spirit could pave the way for much- needed harmony in social and economic integration.
vii Unfortunately this dream was shattered and the Industrial Relations Ordinance 2002 which was implemented soon after the announcement of the fifth labour policy clearly demonstrated that the government and its bureaucratic elements did not desire to take advantage of the growing consensus among the social partners and instead much against the will of the employers and workers, seeds of discord were sown by government when it withdrew the right of freedom of association from many enterprises in the new law.
This brought both workers and their leadership once again at the point of agitation and workers demands that IRO 2002 be withdrawn. The new democratic government which came into power in 2008, has on 8th November 2008 enacted the new Industrial Relations Act 2008 which in effect is a restoration of the IRO-1969 on the premise that the IRO 2002 was anti-union and had to be undone in keeping with the democratic government's political manifesto to support the workers' rights.
In the process, however, whatever good was achieved by employers and workers with mutual consensus and contained in the IRO-2002 was also undone. To what extent IRO 69 and/or IRO 2002 are or are not anti-union needs to be dispassionately viewed in the light of comparative analysis.
The Government has termed this an interim measure and has promised that new legislation will be bought within a period of 18 months after intensive tripartite consultations among social partners during this period. The industrial relations system in Pakistan is once again standing at the debris of history even after its sixty years of existence to get a new start, a new shape and a new structure.
Let us pray and ensure that our industrial relations system be not dragged under the clouds of the 70s and the 80s which will be dubbed by historians as the worst phase of industrial relations blocking the country's industrial, economic and social progress.
Let us not take any step while remaining within our senses of putting the clock of progress thirty years behind in history which act may plunge the country into a state of total economic and social sinkage. Time is still not completely out. Let this be hoped that this opportunity of new social dialogue augur well for defining the pattern of social progress and social justice in the new millennium.
(The writer is Director, Hinopak Motors Limited)
