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On January 07, 1999, the Minister of Labor & Overseas Pakistanys, Sh. Rashid Ahmed, introduced the PML government’s Labor & Manpower Policy in Islamabad. The affair was touted as a major milestone and that after 26 years, a government had the courage to come up with a practical and acceptable policy. The labor hierarchy pointedly boycotted the extravaganza and one could only see either retired labor leaders or second and third tier worker representatives. The Employers’ Federation of Pakistan (EFP) team, led by the avuncular President, Mr Ashraf W. Tabani, represented the employers. There was a sprinkling of Parliamentarians and ILO officers to give it a good show. A few Federal Ministers made cameo appearances and gave required meat to the ubiquitous PTV cameras. The topic mostly discussed was why the haste by the government. What was so urgent about launching the policy? Was it to counteract the brouhaha over the government’s decision regarding the enforcement of Essential Services Act in WAPDA, etc? Was it to satisfy multi-lateral donors? Was it to score some perceived points? Nevertheless, the draft of the policy was presented and, naturally, the workers and employers have their own views on this.

The Employers’ Federation of Pakistan, being the representative body of all employers of Pakistan, carefully perused the draft, prudently considered its ramifications, and evolved a pragmatic assessment. It is of the view that the L&MP should have a Mission Statement clearly focussing on the achievement of the following significant objectives:

1. Generating employment opportunities and promoting employability of abundantly available workforce in the employment market.
2. Removing impediments in the way of speedy industrialization and smooth industrial relations at the enterprise as well as the national level.
3. Achieving a balance between the rights and obligations of industrial partners.
4. Non-interference in wage increases in organizations having established process of collective bargaining.
5. Ensuring no further increase in financial burden on the enterprises in the form of taxes, cesses, etc, other than the one thru collective bargaining so as to provide cost effective environment to enterprises for focussed economic growth, investment, and expansion.
6. Promoting productivity and quality improvement efforts at the enterprise and national stage thru a network of productivity and quality improvement efforts at the micro as well as macro level in order to take full advantage of globalization and other environmental changes.
7. Improving the quality of life for the working class by establishing a linkage between the pace of economic development and quantum of welfare measures.

The EFP believes that in order to achieve the objectives of the Mission Statement, it is suggested that the L&MP should be titled as "Labor and Human Resources Development Policy". Moreover, the Ministry should be renamed as "Ministry of Employment and Human Resources Development" to prepare the country to meet the challenges of the new millenium in all aspects of HRD.

The salient features of the policy are discussed and comments of employers are presented for meaningful consideration:

The EFP agrees that the satisfied labor is the source of development and prosperity for the people and that there is a need to develop human resources thru extensive skill training and better human resources development planning. In fact, the emphasis should be placed on HRD thru Vocational Training and Skills Development Program. The employers endorse the view that the government has to concentrate on good governance and quality management relations strategy. The employers also support the idea of expanding the base of vocational and skills training. The employers will also support any effort to consolidate, simplify, and re-codify the labor laws because they feel that in the course of implementation of various laws, a number of shortcomings and deficiencies have been detected, and that the laws are complicated and overlapping.

The employers welcome a rational approach to determine the wage of different categories of workers and extend full cooperation to evolve a workable strategy and a judicious direction. The EFP recommends the formation of a tripartite National Minimum Wages Council with clear terms of reference to develop minimum wages for different classes of workers employed in industry, keeping in view the inflationary trends, the employers’ ability to pay, and other variable factors prevalent in different sectors in the country. In order to ensure accountability, the employers’ representatives should be nominated by EFP. The employers also agree that a country’s economic development and high economic performance has a direct relationship with higher productivity of its workforce. EFP also agrees that no nation can survive and progress unless its manpower is highly organized, efficient, and productive. The employers endorse the establishment of a tripartite National Productivity Council and desire that their representatives should be nominated by EFP to ensure accountability and to take advantage of the expertise on productivity available in EFP.

With regard to the involvement of workers in the decision making process of an enterprise, the EFP maintains that at present there are five institutions in an organization, viz., CBA, Shop Stewards, Works Council, Management Committee, and Joint Management Board, all having overlapping functions and each eroding the other’s authority. It is proposed that in each organization having fifty or more workers, there should be only two institutions, CBA and Works Council, with sufficient legal support to ensure joint consultation in defined areas of its functions. EFP advises that Section 23-B and 23-C of the Industrial Relations Ordinance 1969 be deleted, and Section 25 of the said Ordinance relating to the functions of the Works Council be suitably amended, to incorporate such other areas of consultation at the factory floor as may be deemed necessary.

An important employers’ demand has been very conveniently side-stepped in the new draft. The employers have been agitating for the right to manage under which they should exercise effective control over their establishments. They have become virtually powerless to discipline workers. It is argued that restoration of the right to manage would not only help maintain discipline but will also be beneficial in boosting production and productivity, The employers are most seriously concerned about malingering and unwilling workers who after protracted litigation may be reinstated and that such reinstatements exacerbate feelings of animosity. The employers are strongly of the opinion that there is an imperative need for simplification of disciplinary procedures even in cases of misconduct.

In order to restore to the employers the right to effectively manage the enterprise, it is crucially essential:

1. To give the employer the right of "simple termination" of the unwilling workers even on payment of three month’s notice pay as compensation. This may be implemented by deleting the words "for any reason other than misconduct" from sentence 2 of Standing Order 12(1) and by substituting "one month" by "three months" in sentences 2 and 4 of the same paragraph.
2. By simplifying the procedure laid down for disciplinary action in Standing Order 15(4) so that the various requirements laid down in this respect thru judicial decisions are consolidated. The Labor Courts hearing misconduct cases may determine procedural issues and not the merits and facts of the cases. In order to achieve the objective, Section 25(2) of the IRO 1969 may be suitably amended.

Another contentious issue is the presence of outside leadership in the executive of the union at plant level. The present law on industrial relations contains the provision regarding induction of outsiders among the executives of the trade unions to the extent of 25%. The outsiders have no stake in the industry and their presence adversely affects the smooth working of the enterprise. This provision has been counter-productive in maintenance of industrial discipline and attainment of objectives of higher productivity and production targets. The outside leadership has very often resorted to blackmailing the management for their own self-interests. There are instances where they have even resorted to instigating non-disciplinary tactics among the workers at the plant level. Even in a country like Japan, outside leadership at plant level is not allowed. Similarly, in the Bangladesh Industrial Relations Ordinance, this provision has been removed and it has ensued into a very congenial atmosphere for investment by Bangladeshi and foreign investors.

The provision contained in Section 7(1) (d) of the IRO 1969 allowing 25% outsiders to retain union office be eliminated as this will enable employers and workers to be free to determine their bilateral relationship without being influenced by interests alien to the plant’s operation. This issue is very crucial and can be resolved by setting up a bilateral Code of Conduct between the employers and the workers and must, therefore, be decided on merit as a legal issue in the larger interest of the national economy.

The employers endorse the view that it is practically difficult to abolish contract labor and thus the issue must be resolved pragmatically keeping the national concern at heart. The employers maintain that contract labor is a bona fide media of providing employment opportunities to the unemployed labor force besides being a universal source of getting efficient and productive workforce at competitive cost. The employers hold the opinion that the existing labor laws already provide sufficient coverage to the contract workers and their rights can be protected by effectively implementing the laws which can be achieved thru their strict enforcement. However, if need be, then the objective can be achieved by appropriately amending the existing labor laws or enacting a new law consolidating the existing provisions in various laws regarding protection of contract labor.

The employers fully support the proposal to promote healthy trade unionism, the employers recognize the right of association and unionization guaranteed under the Constitution and ILO Conventions, and the employers welcome the proposal for finding uniform definitions of the terms ‘worker’, ‘employer’, and ‘wage’. EFP also backs the proposal for creating a Cell in the Privatization Commission to look into the grievances of the employees of the privatized units. EFP also welcomes the proposal to set up the tripartite National Safety and Health Council and enactment of a law for the purpose of ensuring safety at all workplaces. EFP should nominate employer representatives to the Council. The employers also strongly advocate the proposal to bring agricultural workers within the ambit of the labor laws. It will, however, be advisable to keep the cultural norms and traditions of our society in mind while extending the application of labor laws to the agricultural sector in order to fulfil the obligation under ILO Convention No. 11. The employers support the proposal to strengthen the Ministry in the field of labor research and planning.

The EFP stresses that the measures to streamline the functioning of the labor judiciary have not been spelt out. There is an urgent need to improve the functioning of the labor judiciary with the aim to ensuring dispensation of justice and disposal of cases in the shortest possible time. The law pertaining to the creation of National Industrial Relations Commission requires co-opting of workers and employers as members. The employers feel that the tripartite character of old industrial courts being useful in the administration of justice to the satisfaction of the parties merits consideration for restoration. The employers are also of the opinion that only judicial officers with appropriate experience and knowledge of labor laws as well as industrial relations should be appointed as Presiding Officers of labor courts, labor appellate tribunals, and NIRC. The EFP should nominate the employers’ representatives/co-opted members of the judiciary.

The EFP is seriously concerned with the issue of Child labor, specifically its exploitative and intolerable forms. It considers the ILO’s International Programme on the Elimination of Child Labor as a major initiative. The EFP has already joined the movement against Child Labor and has contributed considerably to the awareness raising by holding seminars and workshops in the industrial cities and by way of advocacy. The employers hail any concrete steps contemplated by the government to eliminate the menace and would fully cooperate in the efforts to achieve the objective of gradual and phased elimination of Child Labor. The employers are convinced that making education accessible for the children will stem the flow of child workers into the labor market. The employers are already contributing in the form of Education Cess for the purpose of education. The funds previously collected under the Education Cess and the erstwhile Iqra Surcharge system should be properly utilized for achieving the objective.

The policy does not spell out the measures to widen the scope of laws governing Social Security, Workers Welfare Fund, Workers Incentive, Workers Children Education, and Employees Old-Age Benefit, etc. The employers are not opposed to the review of the working of the laws to ensure prudent use of the amounts collected for the purposes specified in the laws. As a matter of fact, the employers demand that a full account be given about the use of large funds collected from the employers during the past two and a half decades in order to satisfy the employers and the workers that these funds have been judiciously utilized. The employers cannot agree to any review for the purpose of increasing the employers’ contributions because such an increase will definitely put an additional burden on the employers who are already heavily burdened by taxes and welfare levies. The government will be well advised to ensure practical application of the funds collected from the employers, strictly according to the provision of the laws and for the welfare of the industrial workers. It may be noted that the existing laws do not provide spending of the amounts collected in the name of workers’ welfare for the benefit of general public, and it should be ensured that no deviation is made in this respect.

The employers have also been consistently demanding that the number of collecting agencies be reduced. The draft is silent on this issue. The employers demand that there should be only two collecting agencies, one at the Federal level and the other at the Provincial level to collect the respective levies.

EFP supports all steps taken to protect the rights of women workers. The employers consent to the setting up of a committee to look into the Report of the Commission headed by Justice Aslam Nasir Zahid pertaining to gender issues and work out an action plan for implementation of appropriate recommendations. However, this committee should include representatives of workers and employers, with EFP nominating employer members. The EFP also agrees with the proposal to strengthen the inspection machinery at the provincial level to guarantee the implementation of various laws. However, there is a need to bring about transparency in this system and it would be advisable to have nominees of EFP on the inspection and vigilance teams so as to minimize the avenues of corruption and extortion.

EFP contends that mere gathering of labor market information will not be enough to promote human resources. Other steps such as vocational training and launching of skills development programs will have to be undertaken simultaneously. The employers agree with the proposal that concrete steps are required to explore foreign markets for Pakistany labor and manpower as this is a major source of foreign exchange revenue. The employers are also of the view that the licensed overseas employment promoters should be made legally responsible to look after the welfare of the workers sent by them for foreign employment. The employers welcome the proposal to review and restructure the workers education program. A committee at the national level, which should also include representatives of EFP, should constantly monitor effectiveness of the program. The employers have no substantial comments to make about the National Talent Pool Organization set up in 1976.

Notwithstanding the fact that the employers fully support the idea of setting up of National Minimum Wage Council, National Safety and Health Council, National Productivity Council, etc, the employers are surprised that they have already been set up and that the EFP has no inkling about the composition of these Councils. At the same time, the EFP is unaware of the composition of the Task Force on Child Labor. Moreover, the employers apprehend the fact that the government has, in principle, decided on arbitrary increases in the employers’ contributions for various worker welfare schemes.

With reference to the Employees’ Social Security Scheme, the employers are of the opinion that if administrative measures are stipulated to extend the benefits and scope of the scheme, then the following points will need serious consideration:

1. Presently, establishments are covered thru gazette notification by the government. If the process needs to be changed, then the scheme:

1. Should be applicable only to establishments employing more than 50 workers.
2. Should only be applied after the employer or CBA give their consent to cover the

establishments.

3. Establishments offering better facilities than SESSI be exempted from coverage.
4. Medical facility or other allowances already being provided by the establishments

should be discontinued.

2. There is no reason for increasing the employers’ contribution since it will directly increase the financial burden on the employers who are already severally hit by taxes and inflation, and are already finding it difficult to keep themselves competitive.
3. Social Security schemes all over the world are participative in nature, and it is time that the entire burden of the scheme not be put on the employers but that it be shared by the workers as well as the government.
4. EFP, being the most representative national employers’ organization, should nominate employers’ representatives on the Governing Body of the scheme and that the number of such representatives in the Governing Body should be increased to 50%.

The employers are firmly of the opinion that all welfare institutions, such as EOBI, SESSI, Workers Education Cess, Workers Welfare Fund, and Companies Profit (Workers’ Participation) Fund, which are run and administered thru employers’ contributions should be privatized for efficient administration and distribution of benefits. Till such time these are not privatized, the Governing Body of all these Institutions should be reconstituted with fifty percent of their members drawn from the employers’ representatives nominated by EFP and that these Boards should be chaired by employer representatives nominated by EFP in order to ensure proper accountability, transparency, and administration.

The proliferation of trade unions at plant level results in sheer indiscipline and heated rivalries among them. This is not in the interest of healthy trade unionism. The employers welcome the proposal to amend the law to provide that:

• The unions receiving less than ten percent votes in the referendum and those not contesting the referendum will be de-registered.
• Registration of the unions failing to submit their annual income and expenditure returns will be cancelled.

The EFP wholly supports the idea of involving more and more employers in institutional arrangements to expand and orient vocational training to the needs of industry. The National Training Board and the Provincial Training Boards should be privatized and/or made autonomous bodies. The Technical Training Centers and Apprentice Training Centers should be managed by Center Management Committees in order to make them more effective. The number and scope of Skill Development Councils should be enhanced and institutionalized as an integral part of the NTB’s structure since they proved successful as a pilot project activity. The employers also point out that the NTB, in consultation with National Working Group on Apprenticeship and In-Plant Training, has already submitted proposals for amendments in the Apprenticeship Ordinance 1962 to make it voluntary and attractive for employers. These amendments should be immediately implemented. The NTB and the PTBs should be reconstituted with employers’ participation upto 50% and their Chairmen should be drawn from amongst the employers to make them work as per the needs of the industries.

The SDCs have been set up as a private-public partnership program involving EFP, ILO, Ministry of Labor, etc. The aim is to assess the training needs of a geographical area, prioritize them on the basis of market demand, and to facilitate the training of workers thru training providers in the public and private sectors. SDC’s have already proved their success because of the total involvement of the private sector in managing these SDCs.

The employers are in full agreement with the proposals highlighted for the welfare of overseas Pakistanys. The employers also accord assent to the proposals contained in the chapter on HRD and Employment Generation. These include suggestions on employment generation, self-employment, employment exchanges and vocational guidance and employment counseling, educating the unemployed, manpower statistics, institutional machinery for HRD, Human Resources Development, apprenticeship scheme, strengthening the vocational training system, and strengthening the role of national talent pool.

The EFP President, Mr Ashraf W. Tabani, in his address at the launching of the draft of the L&MP sounded a note of caution. He said that the L&MP is a crucial document because it will lead the nation into the 21^st century. He advised the participants not to act in haste but to consider and think on the impact it is likely to have on every action that is taken. The policy should be considered not emotionally but keeping in mind the economic and social realities that surround the country. It should not be made a vehicle for polemics or political expediencies as this will destroy the very essence of the policy. Mr Tabani advised that the severe economic crisis which Pakistan is confronted with at this point in time makes it incumbent upon the people as well as the government to realize the need for greater discipline, austerity, and national cohesion. He stressed that the industrial and business community fully supports the government and the workers in the joint effort to steer the country on the road to prosperity.

The EFP is striving to make the country prosperous thru employment generation, social benevolence, and sustained cooperation. This is the pledge of the employers of Pakistan whether they are in the organized sector or in cottage industries, whether they are small traders or big time importers, and whether they are in domestic manufacturing or in multi-national enterprises.