The Industrial Relations Act-2008 has been passed by the Senate without much comment. So far it has not been presented in the National Assembly. This is a detailed commentary on the Act, from the point of view of the employers before it is moved in the National Assembly. The Bill was introduced in the Senate to consolidate and rationalise the law relating to formation of trade unions and improvement of relations between employer and workmen.
The statement of objects and reasons provide measures to regulate the government's vision on the dignity of labour, the elimination of animosity and antagonism by fostering a trust relationship between employer and employee and the promotion of social dialogue, as also to give right of association to workers and to provide free discretion to trade unions to join any federation of their choice and the revival of the Labour Appellate Tribunal, so as to ensure speedy disposal of labour disputes.
The proposal Bill excludes formation of trade unions in Railways and Pakistan Post, Pakistan Security Printing Corporation, Security Papers and security staff of PIA, establishments meant for treatment or care for sick, infirm, destitute or mentally unfit persons other than those run on a commercial basis, members of watch and ward, security or fire service staff of oil refineries, members of security or fire service staff, in establishments engaged in the production, transmission or distribution of Natural Gas or Liquefied Petroleum Gas.
All these establishments have been excluded from the purview of the new Law. Article 17 of the Constitution of Pakistan recognises the Fundamental Right to formation of Association or trade union subject to "reasonable restrictions". Exclusion of IRO 1969 in the Export Processing Zone has no doubt been upheld by the Division Bench of Karachi High Court in 2004 PLC 217.
However, the concept of such "reasonable restrictions" keep varying with the passage of time. Industries excluded under the Industrial Disputes Act 1947, Industrial Relations Ordinance 1969, Industrial Relations Ordinance 2002 and the present Bill have kept including, or have otherwise been excluded, from the ambit of law.
At one time, even the Karachi Electric Supply Corporation (Removal from Service) Ordinance 1993 was promulgated and even the Division Bench of Karachi High Court in CPD-1026 of 1999, decided on 29-2-2000, upheld such an exclusion. Hospitals have also been excluded from the Industrial Relations Law in the past and its exclusion has been upheld by the Karachi High Court in 1984 PLC 1679 and Lahore High Court in 1986 PLC 521.
Even in the WAPDA provisions, like Section 17(1-A), has been upheld by the Apex Court and finally the provisions of Section 1-(3) of IRO 1969 were upheld in 1989 SCMR 1338 and recently in 2006 PLC 59, Army Welfare Sugar Mills was also excluded from IRO 2002 due to insertion of Section 1(4)(v) of IRO 2002.
In India, Article 19 of the Indian Constitution which corresponds to Article 17 of the Constitution of Pakistan provides for such an exclusion. It goes without saying that if a right is created by a Statute, it can be taken away by the Statute. However, if a right is created under the Constitution it can only be taken away by Constitution and not through any other legislation except on "reasonable restriction".
The concept of reasonable restrictions is therefore to be determined in an objective manner, and from the stand point of the necessity of the general public, and not from the point of view of political expediency or the person by whom such restrictions are imposed. Standard of reasonableness, vary from age to age, and from time to time and has to be related to adjustment necessary to solve the problem which is needed from time to time.
International Labour Organisation Convention under Article 87 recognises the right of formation of Association. Any law which is in negation to ILO Convention, ratified by Pakistan is liable to be struck down by the Superior Judiciary in exercise of its right of Judicial Review. In PLD 1997 SC 781, the provision of Article 17 in the context of Civil Aviation Authority, has been discussed.
In PLD 2005 SC 193, the concept of "reasonable restriction" has been summed up by the Apex Court and limitations imposed on enjoyment of Fundamental Right have been held as not to be arbitrary or excessive, but should be required in the interest of public at large.
So viewe, exclusion of Police or Defence Service of Pakistan or any installations exclusively connected or incidental to the Armed Forces, including the Ordnance Factory and persons employed in the administration of state is justified.
However, there is no justification to exclude all the workmen of Railways and Pakistan Post. Likewise, if security staff of Pakistan International Airlines are excluded, then both public and private sectors can insist that members of security staff employed by them be also excluded from the ambit of law. Pakistan Security Printing Corporation and Security Papers Ltd at one time were excluded from the law, but were included in the IRO 2002.
There is no reason why Pakistan Security Printing Corporation or Security Papers be excluded from law whereas Pakistan Mint be included. Members of the watch and ward, staff for security or for service of oil refineries had been excluded. If this is so, then members of watch and ward security or fire staff of industrial and commercial establishments be also excluded from the ambit of law, as otherwise it will be violation of Article 25 of the Constitution.
Likewise establishments for treatment or care of sick, infirm, destitute, or mentally unfit, other than those run on commercial basis, have been excluded. The emphasis is on commercial basis rather than on the nature of establishment. Staff of hospital and or establishment treating sick, infirm destitute or mentally unfit person, irrespective of being run on commercial basis, or otherwise be excluded, or to be included altogether.
There should be limited exclusion of the provision in law, as to right to form unions, bargain collectively, and all other workmen employed in establishments be deemed to be covered under the Industrial and Commercial Employment (Standing Orders) Ordinance 1968, Provincial Employees of Sindh Social Security Ordinance 1965 and Employees Old Age Benefit Act and other Labour Legislation, otherwise Security or Fire Service Staff engaged in production, transmission, distribution of natural gas or liquefied petroleum gas who are excluded, will have no avenue for enforcement of their rights.
Even in those establishments other than Police, Defence Services of Pakistan and or any other establishment where subject to reasonable restriction, exclusion is being effected an alternative mechanism for redressal of grievances, settlement of issues and problems etc be provided, as envisaged in the object and reasons of the Bill of Industrial Relations Act 2008 to regulate dignity of Labour and elimination of animosity and antagonism by fostering trust relationship between employer and employee and promotion of social dialogue in the law.
If Pakistan Mint has been conferred right of Association, there is no reason, why Pakistan Security Printing Corporation or Security Paper have been excluded. The same apply to institutions like EOBI; Social Security and Workers Welfare Fund who have been excluded from the ambit of Law.
Since in terms of the proposed law, employers are also allowed to form a trade union, a very anomalous position has emerged. The concept of trade union is invariably always associated with a trade union of workmen. No employer, firm or association, can raise an industrial dispute against another employer. Likewise an employer cannot be certified as a Collective Bargaining Agent.
The definition of the term 'trade union' is most illogical. In the first instance, an employer should not be called upon to form a trade union and even if such a body is to be formed it should be identified as an association. It should be defined in law and even the forum before which such Association can approach for relief should be stipulated.
The definition of a Collective Bargaining Agent is also defective. There can not be a CBA in an industry. The word 'industry' is associated with Textile Industry, Sugar Industry, Pharmaceutical industry etc. Establishment should mean and include all departments and branches of an office, firm, factory, undertaking, company or shop, branch of shop, commercial or industrial establishment, premises or enterprises whether situated in the same building or in different buildings, but having a common balance sheet and profit and loss account.
This being so, the definition of the term Collective Bargaining Agent needs to be changed. In the definition of the term 'employer' in Section 2(viii) only a person responsible for management, supervision and control of the establishment is included.
A person issuing directions and undertakes administration of the establishment has been excluded from Industrial Relations Ordinance 2002. Any person responsible for supervision, direction, administration, management and control of the establishment be included in the definition of the term 'employer'.
It is also suggested that not only proprietor but every Director, Manager, Secretary, Agent, Office Bearer or person concerned with the management, direction, administration, supervision and control of the establishment should come within the ambit of the term 'employer'. The definition of the term 'illegal strike' should be read in conjunction with definition of the term 'strike' as proposed in and will be discussed later on.
In the proposed definition of industry, it has been defined as meaning any business, trade, manufacture, calling, service, employment or occupation. This is a very incomplete definition. Such engagement should be for an organised economic activity of producing goods or material services and should exclude establishments set up for charitable purposes, educational institutions, social and recreational exclusive establishments like clubs.
Even establishments where medical care and emergency relief are extended to the poor should be excluded from the ambit of law. The word 'industrial dispute' has been defined as dispute between employer and employer. It is very unfortunate as to how there can be a dispute between an employer and employer and how it is to be raised, in what manner, for what purpose and before which forum and what can possibly be the demand of one employer against other.
Industrial dispute can only be disputes or differences between the employer and the CBA and not otherwise. The word 'lock out' has been defined as closing the place of employment by an employer. This should be qualified by the phrase 'other than termination of service or severance of relationship in any form or manner'. Termination of service or dismissal from service is not a lock out as held by the Supreme Court of Pakistan in 1971 PLC 1 at 11, as also Supreme Court of India in AIR 1960 SC 363.
Unfortunately, even in case of termination of service, legal or illegal, the Directorate of Labour invariably insist that it is a case of lock out, although the termination of service is not a lock out. If the termination of service of an employee is held by the Labour Court or any other forum to be illegal, the employee will be reinstated in service.
The Bill has defined the word 'officer'. The correct word is office bearer. The word 'strike' has been defined as meaning cessation of work. There can be a situation where there is slow down in work in which only 5 to 10 percent of production is given, which for all intents and purposes is not slow down in work but tantamount to partial cessation of work and is a strike. Therefore the word 'strike' should mean cessation of work, absolute or partial.
This will prevent the tendency to resorting to slow down in production, where hardly any output is given, and the machinery operates, electricity is consumed but workers insist on full salary with little or no production. However, if a strike includes partial cessation of work also, then the tendency of slow down in work or go slow will be curbed to a large extent.
The Bill defines a 'trade union' as meaning a body of persons employed in any establishment. The definition of the word 'trade union' means a combination of workers formed for the purpose of regulating the relations between workmen and employer. The word worker in the Bill provides that any person not falling within the definition of employer is a worker.
It goes without saying, that under labour laws, there are workmen, employers, and those who are neither workmen nor employers. A supervisor is not a workman. An apprentice is employed under the Apprenticeship Ordinance. He does not receive wages, but a stipend only. He cannot be identified as a workman for the purpose of Industrial Relations Act 2008, although in the classification of the workmen under Industrial and Commercial Employment (Standing Orders) Ordinance 1968, apprentices are listed as one of the classified workmen.
Co-relating a person to an industrial dispute who has been discharged, dismissed, retrenched or lay off in connection with, or as a consequence of a dispute, or whose dismissal, discharge, retrenchment, lay off or removal has led to the dispute and litigation, should be suitably amended in the context of the view taken by the Apex Court. Also a person employed in managerial, administrative, supervisory or administrative capacity be excluded.