Industrial relations fiasco

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Industrial relations fiasco - I​

Mahmood Abdul Ghani

ARTICLE (August 08 2008): In the development of every new field, a stage is reached when it becomes indispensable to take stock of the whole work done in the past. Industrial relations imply relationship between employers and workers. It covers almost all the labour problems.

Industrial relations comprise topics as government's labour policy, enactment and enforcement of labour laws, labour judiciary, role of labour in economic development, labour turnover, working conditions, labour welfare, wage problems, incentives, role of government etc.

No doubt industrial relations present a complex problem and involve inter-action of various types of factors such as growth, degree of industrialisation, technology, personal characteristics of labour management relations etc. Being a well wisher of democratic institutions, it is imperative that analysis be made of the manner in which industrial relations have been handled so far over the last 100 days.

A classic example is the announcement made by our Prime Minister on the floor of the House. In his inaugural address, he announced that Industrial Relations Ordinance 2002 is being repealed and minimum wage of Rs 6000 per month is being fixed in relation to all unskilled workers.

In so far as the announcement of the repeal of Industrial Relations Ordinance 2002 is concerned, a more reasonable and diplomatic announcement should have been that Industrial Relations Ordinance 2002 was promulgated without taking into consideration the point of view of employers and workers.

Therefore, keeping in view, the repealed Industrial Relations Ordinance 1969, and the provisions of Industrial Relations Ordinance 2002, the government call upon the employers, workers and other stakeholders, including members of the bar, to submit within three months concrete proposals for amendments in the labour laws.

Thereafter a Tripartite Labour Conference will be convened, where views of the all stake holders will be taken into account and amendments in Industrial Relations Ordinance 2002 would be effected.

The Prime Minister should have emphasised that the object of the Labour Law is to help the growth and progress of national economy and it is with that ultimate objective in view that industrial relations will be settled on the basis of fair play and justice either through bilateral negotiations or the process of adjudication.

The Prime Minister should have announced that whereas Pakistan has ratified International Labour Convention, conferring Freedom of Right to Strike and Lockout, yet keeping in view the extreme problem the government has inherited, appeal is made both to Labour and Management to undertake Industrial Truce and voluntarily announce that in the larger national interest, there will neither be any lockout by the employers nor strikes by the workers.

This would have given a strong signal to entrepreneurs, including foreign investors willing to invest their petro-dollars in Pakistan, and privatisation would have been more effective.

Unfortunately, this was not done with the result that immediately after the announcement of the Prime Minister, labour unrest has been witnessed in the country, which will be discussed below. Labour leaders and disgruntled elements took advantage of the situation by not performing work on the ground that Labour Laws have either been repealed or are about to be repealed.

Unfortunately, to the best of our knowledge, at least in the province of Sindh and specially in the Sindh High Court hardly any labour case has been decided in the last 100 days for no fault of our judiciary. The Government announced fixation of Rs 6,000 minimum wages across the board all over the country.

The Government has failed to take into account that no doubt fixation of minimum wage announced is to avoid exploitation of the poor workers, less organised and less privileged amongst the society. However, for healthy progress of nation as a whole, it is imperative that exploitation of labour should be avoided and prevention of employment at sweated labour should be avoided.

Nonetheless, there are certain norms which have to be followed. Surely our respected and capable Minister of Law is well aware that the Apex Court in India had fixed five Norms for Minimum Wage, which have also been accepted by Tripartite Labour Conference in India. These five norms are as under:

(i) In calculating the minimum wage, the standard working class family should be taken to consist of 3 consumption units for one earner, the earnings of women, children and adolescents should be disregarded.

(ii) Minimum food requirement should be calculated on the basis of a net intake of calories, as recommended by Dr Aykroyd for an average Indian adult of moderate activity.

(iii) Clothing requirements should be estimated at per capita consumption of 18 yards per annum which would give for the average workers' family of four a total of 72 yards.

(iv) In respect of housing, the rent corresponding to the minimum area provided for under Government's Industrial Housing Scheme should be taken into consideration in fixing the minimum wage.

(v) Fuel, lighting and other 'miscellaneous' items of expenditure should constitute 20 per cent of the total minimum wage." Keeping in view the socio-economic aspect of the wage structure, Courts have observed that it was necessary to add the following additional component as a guide for fixing the minimum wage in the industry:

(vi) Children's education, medical requirement, minimum recreation including festivals/ceremonies and provision for old age, marriages etc should further constitute 25 per cent of the total minimum wage."

Conditions of labour vary in different industries and vary from locality to locality. The expediency of fixation of minimum wage across the board depends largely upon diverse factors which, in their very nature, are variable and can well be ascertained by the Government.

Fixation of wage and their revision manifestly should be proceeded by a detailed survey and enquiry and not fixed in an arbitrary manner. No uncontrolled or arbitrary power can be exercised by the Government to fix the wage without considering the point of view of labour, management and other stakeholders.

It goes without saying that Islamabad is perhaps the most costly city in the country; and industries set up in Islamabad, keeping in view the cost of living and the conditions of labour, should not be equated to an industry established in the agricultural growing areas of Sahiwal or Rahimyarkhan.

Fixation of wage depends upon many factors which in their nature are always variable and should have been properly ascertained by the Government. Unfortunately, this was not done. It is not known what is the basis for fixation of Rs 6,000 per month as a Minimum Wage. Why should the minimum wage level be not fixed at Rs 7,000 per month or for that matter Rs 5,000 per month.

No doubt no industry has a right to exist unless it is able to pay its workers at least a minimum wage which should necessarily vary from locality to locality. However, now that minimum wage of Rs 6,000 per month has been fixed, our Prime Minister is requested to ensure its implementation, whereby in letter and in spirit, all concerned grant at least Rs 6,000 per month to all employees as minimum wage.

The Government is contemplating fixing minimum wage for semi-skilled and skilled workers. Under no circumstances this be effected. Workers have Collective Bargaining Agent. Let wages for semiskilled and skilled workers be settled through bilateral negotiations keeping in view the capacity of employer to pay, wages paid in comparable concerns and similar other factors well settled by our Apex Court.

Another classic example of the failure on the part of the government to stem labour unrest, is the disruptive trade union activities being followed in the banks, especially in MCB Bank. Section 27(b) in the Banking Companies Ordinance 1962, restricted use of bank facilities and bank for promotion of trade union activities, and otherwise prohibited any person to carry any weapon into the bank premises.

Furthermore, a person, not an employee of the bank, cannot be either a member of union nor an office-bearer of union. Challenging these provisions on the ground of being in violation of International Labour Organisation Convention No 87 or Freedom of Association, or Article 17 of the Constitution of Pakistan is not correct. Even Article 17 of our Constitution provides for Fundamental Right to form an association subject to "reasonable restriction.

Use of company vehicle, telephone and other facilities, is concession granted by the employer, and is not a part of service condition of the employee and can be withdrawn at any given point of time.

This principle has been settled by Madras High Court in 66 FJR 350. Merely because the previous Government permitted workers to indulge in such activities during working hours is no ground to claim continuation of such activities.

Section 27(b) has been constitutionally upheld as valid by the Sindh High Court Division Bench in the case of Bank of America and by the Lahore High Court in the case of MCB. Article 17 of the Constitution provides for Fundamental Right to form an association subject to reasonable restrictions.

There is, however, no Fundamental Right to strike, lock the gates of the Institution, disfigure Bank premises and otherwise proceed on strike without any notice. Likewise there is no Fundamental Right provided in the Constitution whereby employees of banks are allowed to indulge in trade union activities in the premises and during working hours.

In pre-partition India, Whitley Commission on Labour, as early as 1920, no doubt recognised that as trade union movement in the country was in its infancy, there should be some "outsiders" to assist and guide the workers. This assistance and guidance should be for constructive purpose and not to create chaos and confusion or otherwise to settle past scores.

Even ILO Convention No 87, dealing with Freedom of Association and protection of the Right to Organise, nowhere provides for outside professional labour leaders as office-bearer, who have their own axe to grind and create labour unrest in the country.

Before any decision is taken by our elected Government to repeal Section 27(b) of the Banking Company Ordinance 1962, a very careful and detailed study be made involving all stake holders, with national interest to prevail over party manifesto or individual interest.

This law has stood ground and has checked labour unrest in banks during the otherwise troubled eight years of the previous government. It should not, under any circumstances, be repealed merely because certain members belonging to any party or ex-employees of the bank, demand repeal of the same so as to create a situation of unrest in banks and financial institutions, which will have adverse impact on our economy.

Effects of the Karachi Stock Exchange recent crash and report of the State Bank of Pakistan on our economy be kept in view before any decision is taken. Even now in MCB Bank a threat to go on strike, in violation of the provisions of Industrial Relations Ordinance 2002, are being made and announced by outside labour elements who were at one time office-bearers of the union. It is imperative for the people of Pakistan to know that the demand on the basis whereof such strikes in this bank is threatened, is not only unreasonable but unjustified.

If an employee is removed from service after issuance of charge sheet, holding an enquiry, earlier given a letter of appointment, issuing a letter of termination or assigning reason for termination or dismissal or payment of legal dues, including notice pay or provident fund, and if such termination is upheld not only by the Labour Courts, Labour Appellate Tribunals, High Courts but even the Supreme Court of Pakistan, and nonetheless an attempt is now made that such an employee be reinstated in service, this would be a very unfair and unjustified demand.

Similarly if a worker is removed from service, and has lost his case in Labour Court and the matter is pending in High Court, it should be for his counsel to vigorously pursue the case in the High Court in appeal, instead of demanding re-instatement.

There are a large number of employees in bank who have settled their dues in full and final settlement and severed all their connections with the bank but still are some workers and employees who after the termination have not sought their remedy available to them for decades, but now demand that all of them be reinstated in service.

This again would be unfair to the employer, not only in banks but to other institutions also. Respect for our judiciary should be maintained. Decision of the High Court and the Apex Court be respected both by employers and workers.

Merely because an ex-employee belongs to a political party was removed from service years ago, and who has neither been reinstated by any court of law and who has been permanently restrained from indulging in trade union activities, leading to disruption of banking institutions, is no ground to permit such a person to undertake mass movement and create labour unrest in banks and financial institutions, and thereby shake the confidence of the private sector or foreign investors keen to bid for future privatisation in the country.

Business Recorder [Pakistan's First Financial Daily]

 

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Industrial relations fiasco - II​

ARTICLE (August 09 2008): Political parties and the Government have a role to play in ensuring that labour wing or labour bureau of any political party should be discouraged and not permitted to interfere in labour matters. Labour problems should be settled within the law. Let an announcement, in good faith, be made by the Government that there is intent to ameliorate the conditions of service of the workers. This can only be done keeping in view the larger national interest.

The object of labour law is to help the growth and progress of national economy and it is with that ultimate object that industrial dispute, if any are to be settled on the principle of fair play and justice. National interest at all given point of time, should be at the foremost even at the cost of political manifestos.

Very recently yet another fiasco of the Government was noticed in the manner in which labour unrest in Pakistan Telecommunication Corporation Ltd was handled. Needless to mention "Etisalat" according to Moody's Investigator's Service has strong credit rating and is amongst highest of all global rated Telecommunications Companies. It has a flair to provide strong and growing cash-flows.

If recent memory do not fade, the previous Government went out of way in Privatization of PTCL to "Etisalat". No doubt if privatization is effected then "due diligence" is to be effected. Unfortunately it has been observed that "due diligence" on labour matters is neither undertaken by companies entering the ring for privatization nor by the Privatization Commission of Pakistan. Privatization, in all fairness, should be with clean hands.

All information pertaining to the companies to be privatized be provided to avoid any future labour unrest. It is suggested that any future sale to be made under Privatization Commission, it should necessarily ensure that a survey on labour matters in relation to the industry to be privatized is conducted. Areas where the new stake holders may face labour problems has to be identified and it should be circulated amongst the prospective bidders.

This may discourage certain bidders from entering the ring but this will help avoid labour unrest in the long run. At the same time, our brotherly and friendly people from the Middle East, who have helped the people of Pakistan in our hour of National crisis both economically and otherwise, must realize that if they invest abroad they have to comply with the law of the land where such investments are made.

Every individual institution interested in entering the ring of prospective bidders must undertake due diligence on labour matters, which identify the problems they are liable to face and thereafter take a decision so as to opt for privatization. The recent labour unrest in PTCL now requires to be examined. It is alleged that PTCL introduced UPS (Uniform Pay Scales) in a very arbitrary manner. If this was so then this was a mistake on the part of PTCL.

If the existing pay scales were not workable or manageable, PTCL instead of unilaterally introducing their own unified pay scale should have raised industrial dispute and had the same adjudicated from the Court of law, in the instant case National Industrial Relations Commission.

The workers on their part, instead of resorting to illegal strikes, could have approached the court of law to obtain injunction against such UPS (Uniform Pay Scales). Legal and constitutional avenue should have been adopted. Just as workers have their grievances and demands, much in the same way employers also have their own grievances and demands.

It is not known, why the Ministry of Labour, Manpower and Overseas Pakistanis, immediately when the labour unrest was brewing in PTCL did not intervene and in accordance with the provisions of Section 49 (4) (a) of Industrial Relations Ordinance 2002, refer the demands both of the union and the workers of PTCL and the Management of PTCL to the National Industrial Relations Commission for adjudication being a matter of national importance.

In such a situation, illegal strike could have been avoided in the PTCL and within the framework of law the grievances and demands both of the workers and employers could have been resolved. Thus wrong message to prospective bidder in future privatization could have been avoided.

Instead the Government and the cabinet constituted a committee, and for the time being, atleast, not only compelled PTCL Management to withdraw Unified Pay Scale, but also gave 35 percent rise in salaries and all NCPG employees have been regularized. In spite of massive unemployment in this country, the superannuation age has been raised to 60 years.

No doubt its immediate effect has lead to calling off strike, but a very unfortunate message has been given to employees in the other sectors and a wrong precedent set, that with resort to illegal strike, disruption of work and production, locking of the main gates, non-performance of work and resort to brute force alone, demands of the workers could be met.

This will lead to chaos and confusion with no respect for rule of law. Already announcement has been made in the Parliament, without realizing its implications, that IRO 2002 has been repealed. There is nothing to prevent employees in other sectors, more particularly privatized bank from resorting to such coercive means for achieving their demands.

If labour unrest are to be resolved in the way PTCL issue was dealt, let Government announce policy of disbanding of National Industrial Relations Commission, labour courts and other judicial institutions, as also repeal Industrial Relations Ordinance 2002, which is aimed at peaceful resolution to labour disputes, and settle labour matters based on political expediency.

It is not in the interest of the Government to further promote this unfortunate fiasco or to have it repeated again in other sectors. Let the rule of law prevail in this country and let industrial peace and harmony prevail. Allow courts of law to function within the ambit of law, and insist on the directorate of labour welfare in all the four provinces to ensure implementation of labour laws already in force.

Let a moratorium on further strikes or lockouts at least for two years be announced voluntarily by all stakeholders. Even the process of further privatization will be retarded. This will be a sorry state of affairs. As a well-wisher of the Government, which has inherited a mess of ten years of the past, let a careful decision on industrial relations be made.

The Government of Pakistan had announced to regularize all contractual employees of Government organisations. This was a political decision. Taking clue, now employees of the private sector have also started demanding that contractual employees should also be regularized. This is unfair to the private sector. The Government has introduced earlier, a new concept of contract labour in the classification of workmen.

Labour laws are not applicable to Government employees. However, they are applicable to private sector industrial and commercial employees. Before making any political announcement pertaining to labour, a very calculated announcement is imperative so as to ensure that the decision of the Government in relation to employees in Government organizations are based on certain circumstances, which are not necessarily available in relation to private sector employees.

If privatization is to succeed in this country, and if private sector is to flourish, then the Government must ensure that their announcement is not based on political expediency, as its snow ball effects are created in the private sector.

A very careful and calculated announcement must precede Government announcement for employees in Government organization, for such benefits are conferred and confined to peculiar situation in Government organization and across the board.

WILLIAM GOODWIN (1756-1836), IN ENQUIRY CONCERNING POLITICAL JUSTICE, 1798 VOL-2, BK VI, CH.1 HAS APTLY REMARKED:

"Commerce never really flourishes so much as when it is delivered from the guardianship of Legislature and Ministers" It is, therefore, suggested in longer national interest that the following timely measures, for future, be taken by the Government of Pakistan to avoid fiasco and labour unrest in the country.

a) Government of Pakistan should announce, in no uncertain terms, that lock out by employers or strikes by workers will not be encouraged and that there will be industrial truce and moratorium on strikes and lock outs for at least two years. This is no violation of constitution or fundamental right.

b) Government must direct the labour courts and request the High Court to grant top priority to labour cases and ensure backlog of labour cases both in the labour court and in the High Court are decided on priority basis.

c) Government should make it clear that till the new law is promulgated IRO 2002 shall govern the relations between employers and workers. All Employers' Association and Federations and Trade bodies and all the Workers Federations and individual unions be called upon to make concrete proposals in writing and submit the same to the Federal Ministry of Labour, Manpower and Overseas Pakistanis for specific amendments in various labour legislations, giving reasons and grounds for such amendments.

Once this process is completed a Tripartite Labour Conference be convened and based on the unanimous decision, labour laws be amended.

d) That any proposal aimed at introducing Industrial Relations Act 2008, unilaterally and without taking the point of few of the employers and workers should be shelved as this will breed further labour unrest in the country.

e) It should be made clear to the workers in the banking sector that under no circumstances, provisions of Section 27(b) of the Banking Companies Ordinance will be shelved. However, proposals for amendments in the law would be welcome and given due consideration.

f) Workers should be made clear that demands for reinstatement of employees whose cases have already been decided against them by the labour courts, High Courts as also the apex court cannot be reopened being past and closed matter. If on political ground it is deemed necessary such persons be absorbed in state-owned banks like State Bank of Pakistan or National Bank of Pakistan.

g) That Government of Pakistan in relation to already privatized institution should not directly interfere and impose their pressure on the privatized employer as this will discourage future privatization in the country.

h) That Federal Ministry of Labour, Manpower and Overseas Pakistanis should be handled by persons well conversant with the labour laws who should give suggestions to the Federal Minister of Labour and the secretary labour aimed at avoiding labour unrest, strikes. Locking of the gates of either of the banks or financial institutions and other national assets as a means to pressurize employers for acceptance of their demands be avoided. Instead, government should encourage reference to the National Industrial Relations Commission being matters of "national importance" for adjudication of the demands.

In the past reference was made by the federal government of industrial disputes in the case of Karachi Port Trust, Southern Sui Gas Co Ltd, Karachi Electric Supply Company Ltd, Ghazi Barothra Project all aimed at, what is termed in America terminology as a "cooling period".

The labour leaders should ensure that they have faith in our judiciary and without unnecessary adjournments and within a short period, but within the ambit of existing law, the disputes are resolved in legal and constitutional manner, subject of course to right of appeal.

Interference by the federal government or the cabinet as was done in the case of PTCL should be avoided. After all the present management of PTCL and the Government of UAE has done more than a favour to Pakistan by not demanding, our government to take over PTCL and return back billions of dollars they have given against privatization.

i) The Privatization Commission on their part should ensure that it exercises due diligence on labour matters and in all fairness prepare a working paper to be distributed amongst all the stake holders and bidders in the ring who should be made known as to the actual state of affairs existing in the industry so that Government is not made thereafter to interfere in privatized institutions.

The Privatization Commission should not only identify possible areas where labour unrest can be created but should even suggest, in the working paper possibly legal and remedial measures they can adopt. Even the ambit and scope of the existing Industrial Relations Law should be asked to be followed and caution the stake holders, that the law of the land have to be complied with and within the framework of the law, labour unrest should be avoided.

j) The National Industrial Relation Commission constituted under I.R.O. 2002 has also advisory role. It has suo moto powers to interfere in threatened illegal lockouts and strike and pass appropriate prohibitory orders in exercise of its suo moto powers. This institution has been set up on tax payers money. It should act promptly and effectively.

It is recalled that when the workers of Sui Southern Gas Company had threatened illegal strike, Justice Dr Ibrahim Mahmud, Chairman, NIRC had passed an order, at his house, at 6.00 pm on 25th December, a public holiday at Karachi prohibiting strike in Sui Southern Gas Company in Sindh and Balochistan and ordered publication of such prohibition order in all national dailies and even directed publicity of such order to be telecast in Pakistan Television news at 9.00 pm, which was done.

The illegal strike in Sui Southern Gas Co was thus averted. It is regretted our newly appointed worthy chairman of NIRC was not duly and promptly informed of this fact and the exercise of suo moto powers was not exercised which made judicial interference not possible and resulted in labour unrest in PTCL.

Business Recorder [Pakistan's First Financial Daily]