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An appropriate labour policy for Pakistan - employers' point of view.

A progressive employment oriented Labour Policy is inevitable for bringing the country on real path of industrialization which is today's prime need. I am of the view that both employers and workers have to create an environment wherein voluntary contribution for industrial relations comes forward in a manner and spirit practically workable for the development of our country. Bitterness of the past has to go and we shall have to learn and behave like equal partners if we really wish to industrialize and bring prosperity for our masses. While growth of entrepreneurship help create capital, growth of healthy working force creates opportunities for real investments of capital thus both have to move together and are equally important to each other. As believers in Islam we do not have the need to search for man made codes, ILO convention or human rights charter. All we need is to have a strong faith in our defined system and if followed properly is the best solution to our problems not only related to industrial relations but to our general life. In this spirit I would like to give my views reflecting the thinking of employers on an appropriate Labour Policy for Pakistan.

Industrial Relations/

Labour Laws

It has been observed that almost all Labour Laws, rules, legislations as existing today are complicated, ill defined, cumbersome and being a continuity of over a century old Laws, in most cases irrelevant to today's needs. Accordingly it is proposed to set up a high powered commission headed by High Court sitting Judge or retired Supreme Court Judge with a tripartite composition and experts to simplify, codify and consolidate the existing volume's to a single small booklet. All out dated century old Laws framed by English people to suit colonisation and all punitive Laws which were legislated to curb growth of Industry be done away. Islamic spirit instead of any international set of rules be adopted to give Pakistan disciplined employers and workers. Until the finalisation of the commission's work it is proposed to adopt the following policies some of which if proved worthy can be in-corporated in the commission's recommendations to be adopted and continued.

Trade Unionism/Freedom of


Encouraging healthy trade Unionism should be the employers policy. To ensure healthy trade union activities it is essential that mushroom growth of trade unions be discouraged. Multiplicity of Unions adversely effects Industrial relation in an establishment. To ensure representative character of a trade union CBA with minimum 40% representation may be recognised and after every CBA referendum other unions must cease to exist. To ensure stability, no motion of no-confidence be allowed before six months against the CBA. All Private/Public sector organisations must have the right to form associations. Convicts may not be allowed to take part in any Union activity and may not be elected to any position. Industry wise Union Association can bring stability and also check mushroom growth of activities. The best set up for a Trade Union is to have their own people representing them in affairs related to their organisations. Outsiders not belonging to the organisations have very often failed to understand Local problems as mostly these Union leaders are products of self grievance which elevated them to present position. Normally such people have a bias attitude towards employers and are harmful as trade union leaders. With the exception of very few majority have been instrumental in closure of many units. Others in the field are more constructive and have helped in development of Trade Union Activities and are available to plant level trade Union office bearers for advice and consultations on matters related to legislative problems. Pakistan is now entering into the phase of industrialization and as all industrialized nations did during their period of growth we shall also have to pay our share. To ensure rapid growth and attract investment certain concessions may have to be extended in the form of cessation of sympathy striked, go slow and adoption of non productive methods. This is nothing new. The champions of today availed this opportunity for their growth in the yester years of their industrialization process and availed all methods to facilitate them in elevating to present status.

Contract of Employment

At the time of entering into a contract for employment clear terms and conditions must be understood and agreed upon. It must be obligatory on both employer and worker to enter into an agreed service contract which can or may be modified later with consensus or arrangements entered into by the trade unions of the respective organisations. The Government may by way of legislation provide and prescribe terms and conditions of service for those organisations who do not enter into an employment contract. As is practice in every Law of contract either party the Employer or worker may give notice for termination of contract as provided for in it and terminate the relationship entered into by way of the contract.

Consultative Committee

at Plant Level

It is proposed that every Industrial organisation at plant level must have a consultative committee consisting of Workers Representatives and Management. This will bring in understanding of Management problems as well as workers problems more practically and since both will be exposed to each other's problems a solution would be easy to find. They should meet atleast every month or more frequently if needed. The present system of multitude representations may be done away with.

Wage Policy - Minimum Wage

and Wage Increase

It is recommended that a tripartite National Wage Council be set up which should be responsible to determine/fix a minimum wage for unskilled workers at the national level and/or regional level after taking into account the relevant parameters.

The employers however strongly object to the wages being constantly reviewed from time to time by the Government. While collective bargaining has been recognised as the basis of labour management relations the Government as a policy should not interfere in the matter which are provided for in law to be settled through collective bargaining. The government should also refrain from increasing wages or any other monetary benefit directly through legislations in such establishments where the collective bargaining is operative. While making laws and standards the enterprises where collective bargaining is operative should be provided due protection and coverage and such enterprises should not be made to be doubly penalised for their being progressive and adhering to the laws of industrial relations. So far as fixation of minimum wages for workers is concerned the issue should not be seen in isolation and as a concept the minimum wage should be linked with the concept of minimum productivity/output per worker". Besides while fixing minimum wages, the following considerations must be keep in view by the tripartite wage council.

a) Minimum wages must be allowed to grow as a function of demand and supply in a free economy. The minimum wage also has the effect of regulating employment generation in the country and arbitrary increases will have adverse affects on this process.

b) The interest of small industries and entrepreneurs even in large cities must be protected who may not find it practical to increase the wages of their workers other than the normal process of negotiating wages with the individual as a contract of employment taking into account the paying capacity and performance of the establishment.

c) If minimum wages are drastically increased a tremendous increase in cost of labour will have fatal effects on the existing industries in the remote industrial areas of the provinces and will also have a limiting impact on investment climate, country's export capability and otherwise competitiveness.

d) The term "wages" for the purpose of minimum wages should include basic wages, cost of living and dearness allowances and all cash allowances and payments to workers in any form whatsoever, conditional, or unconditional during a month.

Festival holidays and


Except for the religious Festival Holidays and National day all holidays to be done away with. It has been observed that Unions demands sometime include conditions like to provide Haj passage/ expenses to workers or to allow certain workers every year to perform Umra at Employers expenses. To allow free time for offering Prayers or reducing working hours during RAMZAN all at the cost of the employer. This does not seem to be fair practice. Religion and its observance is between individual himself and GOD. How can anyone perform the requirements of religion at the cost of others and expect benefit of his prayers. This must stop. No union should add these type of demands in their Charter of Demands while negotiating with the employer. On the other end if any employer on his own desires to offer expenses and send his workers for Haj or Umra, it would be treated an act between the Employer and Worker and must not form part of contract or industrial relations. Same should be the matter of any concession allowed or availed by the Employer/worker.

Construction Farm Contract Workers

It is time now that working force belonging to the construction and Farm sector be recognised as industrial workers and extended with all facilities available to the Industrial workers. Full protection for health, safety and safe working condition must be guaranteed. Contract workers system must be regulated to ensure treatment in industrial relations.

Health and Safety

A tripartite council on Health and safety to identify industrial Hazards and recommend measures is badly needed. It is time that the Council is established as a permanent Council working on continuous basis. This council may also be made responsible to recommend measures to control industrial pollution and provide the much needed protection to environment.

Labour Productivity Council

A National Labour productivity council with a tripartite structure and experts be established on a permanent basis working continuously to ensure acceptable measurements of Labour productivity. This will go a long way in helping to promote healthy Labour Management relations.

Welfare of Workers

To ensure smooth and efficient working only one agency each at the provincial and Federal Level be made responsible for collection of levies and disbursement of benefits. Social Security benefits be extended to all industrial workers including Farm and construction/mining (all to be treated as industrial workers). For the time being and until the Social Security system gets it root and understood, only establishments employing 50 or more workers be brought into the net of this system. it is also essential that in order to make the system more workable and to ensure commitment to the system from the workers the scheme should be made contributory by the worker also. Only in such condition the worker will feel as a real partner and beneficiary from the system. In order to root out corruption and inefficiency from the administration and to make Social Security real effective the Board of Governors responsible to administer the system must consist of 50% representatives from the employers in a tripartite arrangement.

Employees Old Age Benefit Scheme

This is perhaps the only body within the Government sector which is working efficiently at the top Management level. In order to improve the field working and to help the EOBI Management to perform more efficiently it is essential that the Board of Trustees have effective representation of employers to the extent of 40% within a tripartite arrangement. The implementation of the scheme can be made more effective and meaningful with the increased and effective participation of the employer at the Policy implementation stages.

Provident Fund/Gratuity

It is proposed that every industrial worker must be entitled to either one of the benefits at retirement or termination of the employment contract.

Workers Participation in Profits

The present share of profit meant for the workers does not go to the deserving and instead goes to a fund which is unaccounted. It is proposed that a governing body with 60 per cent Employers representation within a tripartite setting be made responsible to administer this scheme and decide its parameters for the benefit of the workers.

Workers Children Education/

Welfare Fund

This scheme is totally mismanaged and unaccounted for. As proposed by me earlier one single agency can handle all affairs at provincial level and one at Federal level. This scheme must go accordingly and with increased representation of employers at all levels the shortcoming can be met and corrected.

Training of Industrial Human Power

Human Resources Development, Labour market analysis Education, Training and employment, Research and development are part of the requirements for worthy Human Power needed for development of and industrialisation of any economy. In the absence of any industrial body directly involved in these activities it is very essential that such organisation be encouraged to come into being so that with greater involvement of industrial employers in these activities a proper approach to providing assistance in Industrial Training of human power could be practically met. The only employers body working on Industrial relations is the Employers Federation of Pakistan which indeed is doing a wonderful job within its limited resources. For further work industrial bodies are needed and it is time that the Government realises the importance of Chamber of Industries which alone can come to the rescue and provide assistance in HRD, Industrial Training etc. The World has now realised that in order to boost Industrial training activities the private Sector has to take the lead and practically take part in the process which until now is with the Government Sector and has failed to yield results. It is proposed that Federal Ministry of Labour Manpower and Overseas Pakistanis through NTB (National Training Board) at the National Level and PTB (Provincial Training Board) at the provincial level with 60% representation of employers should be the authority for vocational training, needs assesment, curriculum development, conducting training, skill standard testing, certification etc. and the Chamber of Industries can co-operate by assisting in institute building, practical Liaison with the industry and to assist in research of requirements for available and workable training system. It can also be a partner in certification as is prevalent in many countries. Employers representation on all bodies must also come from Chamber of Industry and Employers Fed. of Pakistan and should be specified so in the policy.

Population Planning

Special incentives and education is needed to control population growth. To reward workers observing population planning special consideration may be made through Social Security, EOBI, Welfare Fund and workers Profit Participation Scheme. Educational facility for higher studies can also be considered from Iqra funds for children. Free advice on population control and free distribution of condom's be provided by the population Planners through respective Employers and also involve Chamber of industries in propagating and assisting the Planners in controlling population growth. If the growth rate is not brought down, every policy how so ever good will fail and all efforts to bring prosperity shall go in vain.

It is my belief that if we really want to move ahead towards good industrial relations, the understanding between the employer and worker has to improve and understood. To attain success it is essential to enter into bilateral arrangements at all levels and expose each other to such an extent that understanding each other's problems becomes visible and easier to solve. Constant bilateral contacts with Labour Leaders/Employers is perhaps the first requirement towards achieving the goal of healthy industrial relations and industrial development of our country.

A renowed social worker - AHSAN ULLAH KHAN (58) is the Chairman, Labour Committee, Site Association of Industry, Karachi, the Convenor SITE Citizen Police Liaison Committee and is a Justice of Peace. He also acts as an Advisor to the Chairman, SITE Association of Industry besides being an elected member of Employers Federation of Pakistan. He is a Member of Provincial Training Board, Directorate of Manpower, Government of Sindh. He is the Director of Shahsons (Pvt.) Limited and 3A (Pvt.) Limited. He passed Senior Cambridge and got Diplomas/Certificates in Mechanical Engineering, Administration, Quality Assurance, Industrial and
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Title Annotation:Industrial Relations in Pakistan '92
Author:Khan, Ahsan Ullah
Publication:Economic Review
Date:May 1, 1992
Previous Article:ECPL employees led buy-out experience.
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