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Present labour laws and its difficulties.

Through its long history Pakistan has had various labour policies framed by various governments in power. Over the period of time these policies were changed in accordance with the exigencies of the situation. If one may recall correctly we have had four labour policies since 1955, based on various concepts:-

1. In 1955, Dr. Malik prepared a labour policy based on the concept of |Paternalism'.

2. In 1958 the policy framed by Lt. Gen. Burki was |Legalistic and Bureaucratic'.

3. The 1969 labour policy by Air Marshall Nur Khan was the first to incorporate the concept of |Bilateralism'.

4. In 1972, we saw a further change through Mr. Hanif Ramay. His policy included the concept of |participation in Management'. Our present labour laws are governed by this policy.

Any policy serves its purpose only when it is practical and can be implemented without any problems. The present labour policy has certain shortcomings which need to be looked into. We will first take certain sections of the Industrial Relations Ordinance, 1969 dealing with |Participation in Management': Section 22(ee) Determination of Collective Bargaining Agent Unit; Section 23(a) Shop Stewards; Section 23(b) Workers Participation in Management; Section 23(c) Joint Management Board; Section 24 Works Council. In all the above the workers representatives are to be nominated by the CBA. A perusal of the function of these committees is necessary.

Shop Stewards

Shall act as link between Management and Labour, assist in the improvement of arrangements for the physical working conditions and production work in the shop and help workers in the settlement of their individual grievances.

Workers Participation in Management

This law ensures that workers from a committee with the Management (workers participation) 50 per cent of the Management Representation) and it makes it imperative and mandatory for the employer to restrain themselves from taking decisions on specified functions without receiving advice in writing from the workers representatives.

The main functions are: a) Framing of Service Rules and Policy and discipline of workers b) Changing physical condition in the factory c) In service training d) Regulation of working hours and breaks e) Legal schedule f) Recreation and Welfare g) Matters relating to order and conduct of workers within the factory.

Joint Management Board

The workers participation would be 30 per cent of the management representation. Its functions would be to look after: a) Improvement in production efficiency and productivity. b) Fixation of job and piece rate c) Planned regrouping or transfer of workers d) Law down principles of remuneration and introduction of new remuneration methods.

Works Council

Workers participation would be 100 per cent of the management representation. This council would ensure that: a) Continuous sympathy between employer and workmen is maintained. b) Promote settlement of disputes and differences through bilateral negotiations. c) Promote security of employment for the workmen and conditions of safety, health and job satisfaction in their work. d) To encourage vocational training with the establishment. e) To take measures for facilitating good and harmonious working conditions in the establishment, to provide educational facilities for the children of workers in secretarial and accounting procedures and to promote their absorption in these departments of the establishment. f) To discuss any other matter of mutual interest with a view to promoting better labour management relationship.

A detailed study of the functions of these committees will show that not only do they tend to overlap one another but at times are in direct conflict with the functions of the CBA.

Both the Management and CBA have been hesitant to implement this aspect of the IRO. Some of these functions give the various committees a right to have a direct say and influence in major management policy decisions. it is felt that the minds of the workers are not mature and capable enough to handle these effectively. Furthermore, in our present day situation of untrained, sentimental and politically motivated labour force, their participation in the management in formulating policy decisions in respect of promotions, transfers and production/cost objectives is bound to create misunderstanding and confusion leading to ill will rather than benefit either labour or management and may become yet another lobby for agitating labour demands.

The CBA too has not shown much interest in the implementation of these sections of the IRO. It has become a standard practice with most managements to draw up a two (2) year's agreement with their CBA through bilateral negotiations. This agreement covers wage increases, promotions, welfare, facilities, production incentives, bonus and other issues. This agreement is binding on both the parties for the period agreed upon and has no scope for any changes during the period of its tenure. During bilateral negotiations it is usually found that although there are 5 to 6 CBA representatives involved in the negotiating process the General Secretary or President is the only spokesman of the group. He is the only one who has a complete grasp of the overall situation and the pros and cons of the issues at stake. Nominating members to these committees by the CBA would be tantamount to handing over powers to juniors. This also requires delegation of responsibility and authority which require quite some expertise and the willingness to part with powers an authority.

Outside Representation

Under the IRO 25 per cent outside representation is allowed to the CBA on its executive body. The outside representatives are not employees of the company nor do they have any sympathy with the particular industry. They are normally lawyers or politicians and dismissed employees termed professionals. They usually carry a chip on their shoulders, are self-centered and have their own axe to grind. The modus operandi is to dominate the labour scene through a policy of confrontation with the management and tension amongst labour. This outside leadership has setbacks for the labour too. It hinders the process of workers developing skills and leadership amongst their ranks and stifles their growth potentialities and vitiates the atmosphere during bilateral negotiations

Profit Participation Act, 1968

This is an act to provide for participation of workers in the profit of companies. The profit percentage to be distributed is 5 per cent subject to a worker getting Rs. 1,500 (maximum), as his share of this profit among share per worker will in no case exceed Rs. 1,500. The balance amount left over will be deposited in the Workers Welfare Fund.

This profit participating fund was a very good scheme as it motivated the labour towards better efficiencies and productivity and also gave them a sense of participation. The Rs. 1,500 limit was fixed in 1968 when the purchasing power of the rupee was fairly strong. Since then the value of the rupee has eroded considerably (by over 30%). The limit of Rs. 1,000 does not hold good any more due to severe inflation over the years. The labour now feel that a large amount of this 5 per cent profit is deposited to the Welfare Fund from which no immediate benefits are derived and to which companies already contribute 2 per cent. Due to these factors the purpose for which this Profit Participation Fund was created is being negated and the initiative and drive of labour killed. The full amount of Profit Participation Fund should be distributed amongst the labour as it is their just due and is high time to give serious thought to this.

It is high time for the new labour policy to be brought out so that all these and other shortcomings can be overcome. I am sure all schools of thought must have been consulted in this respect. Let us have a labour policy keeping in view the modern industrial and social requirements and a practical one so that both labour and management can work hand in hand towards a strong industrial Pakistan, without each feeling that one is victimizing the other.
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Title Annotation:Industrial Relations in Pakistan '92
Author:Meherali, Salim
Publication:Economic Review
Date:May 1, 1992
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