Workers' wages: EFP urges government to establish 'emergency fund'

The Employers' Federation of Pakistan (EFP) has requested the government that every factory, industrial and commercial establishment should be allowed to establish an "emergency fund" to be used by enterprises for payment of workers' wages, which may meet the requirement for the next three months.
In this regard, the EFP has written a letter to the Sindh government. The EFP is of the opinion that if the government does not come out with substantial support to the industrial sector by pursuing the above recommendations, the economic and social consequences of the COVID-19 will result in complete economic and social lockdown with grave consequences.
When discussed, leading chartered accountant cum labour law expert Asif Kasbati opined that for the matters due to lockdown of almost all factories and offices, there is a serious cash flow shortage as inflows are close to none and outflows are material in the form of fixed costs including salaries, wages, rent, and interest etc.
In the backdrop of the government orders for no lay off and payment of wages and salaries by March 31, 2020 and effectively thereafter too, the EFP in its letter to the Labour and HR Minister Saeed Ghani addressed as "Combating the effects of COVID-19" encompassing inter alia: Understanding of the standing orders whereby lay off workers up to 14 days with half pay and terminate them if the situation continues for an indefinite period.
The EFP recommendations in order to avoid above labour and other employees unrest, and April wages and salaries be shared at the ratio 1:1 between entities and the WWF. The May wages and salaries be borne by the WWF.
Further for trans-province entities (having operations in more than one province), the federal government will be involved as the Federal Indirect Relations Act 2012 (FIRA) was challenged in the Supreme Court (SC) as all the four provincial high courts had held this as ultra vires to the Constitution.
The SC vide order dated March 28, 2018 had then upheld Federal IRA retrospectively from May 1, 2010 in CA No. 1583 to 1598 of 2014, etc held that in case of trans-province entities, the FIRA will be applicable.
He further explained that due to the above SC order, in another later SC and HCs orders about the WWF and WPPF, stays/interim orders have been given, Kasbati explained.
Hence, it is expected that the issue will be for other provinces' authorities, owing to their actions as Sindh Labour & Employees' sensitive issues and due to trans-province issues, all the companies have to watch for the FIRA, the WWF, the WPPF, standing orders etc, Kasbati added.
According to the EFP letter, the EFP is fully conscious of the havoc created by the coronavirus pandemic and its threat to human life and safety. The EFP appreciates the initiatives of the Government of Sindh for being the first province in the country taking pragmatic steps for preventing the outbreak of the COVID-19 by declaring a total lockdown.
The EFP has already extended its total support to the government's initiative of closing down all factories, offices, plants and facilities except those dealing with essential products and services.
This support was clearly conveyed in the meetings of implementation committee and the tripartite deliberations held during the last two weeks on the subject.
The Government of Sindh issued a notification under the Payment of Wages Act in which the industries were asked to pay full wages to the non-attending workers during the lockdown period.
Without going into the legality of the said notification, the EFP stood solidly beside the government in prevailing upon the industries to comply with the government instructions and ensure payment of full wages to their workers including daily wages, piece rated and contract workers for the month of March 2020, the EFP said.
Since the lockdown seems to prolong during and beyond the month of April 2020, the industries are facing serious economic consequences due to the continued closure of operations. The industries are communicating to us that it is becoming increasingly difficult for them to survive and carry on with the current workforce without resorting to layoff since conditions are going out of their control.
The Standing Orders Act allows them to take necessary measures including laying off their workers up to 14 days with half pay, and to terminate them if the situation continues for an indefinite period.
The government should intervene in the matter and take immediate viable decisions in consultation with stakeholders, before it is too late and the enterprises start approaching the courts for seeking legal reliefs/remedy, the EFP added.