May 7, 20160

Room # 3, Falaknuma Bldg.
39 Abdullah Haroon Rd.
Karachi, 74700
Phone: (021)32727266

Date: 07-05-2016

Circular Number: C-163


 The 18th amendment of the Constitution totally abolishing the Concurrent List has created controversies and conflicts as provincial Governments are making their separate and different Labour laws with difference in provisions. Instead of totally abolishing the Concurrent List, it could have been modified, curtailed and retained.

Our comments on the Six Labour Laws made by the Government of Sindh are as under:-

  1. The Sindh Industrial Relations Act, 2013

    It is more or less the same as the Industrial Relations Act, 2008 of the Federal Government. Please see our Circular C-139 from our website

  2. The Sindh Employees’ Old-Age Benefits Act, 2014.

    It has been made in a hot haste without fully realizing the consequences. Employees Old age Benefit law especially provides benefits (pension and old age grant) from EOB Fund to the employees at the age of 60 years males and 55 years in case of women. The Sindh Government has made this law but till to-date no Institution or fund has been created under the Sindh EOB Act, 2014. Sindh EOB Act repealed application of the Federal EOB Act, 1976 but there is no provision in it for those employees whose contribution had been paid to the Federal Institution and thereafter to the Sindh Institution. How and which Institution shall pay pension to such employees from which fund. Sindh EOB Act, 2014 created has conflicts and confusion between the provincial law and the Federal law. Please see our Circular C-154 from our website

    1. Sindh Worker’s Welfare Act, 2014

      Please see our Circular C-158 from our website .

  3. The Sindh Workers Compensation Act, 2015

    It is more or less the same as the Federal repealed Workmen’s Compensation Act, 1923. Section 44 of the Act repeals application to the Sindh the Federal Workmen’s Compensation Act, 1923 and the Federal Employers Liability Act, 1938. Its Schedules I to IV need to be carefully perused and compared with Schedule I to IV of the Federal Act.

    However the death and permanent total disablement compensation as per the revised schedule IV has been increased from Rs. 2 Lakhs to Rs. 5 Lakhs. Many smaller employers could not be able to afford to pay such revised high compensation.

  4. The Sindh Minimum Wages Act, 2015.

    It is more or less on the same lines as the Federal Minimum Wages Ordinance, 1961 and as per Section 21(1) & (2) having repealed application in Sindh the Federal Minimum Wages, Ordinance, 1961, the Federal Minimum Wages for Unskilled Workers Ordinance, 1969, and the Federal Employees Cost of Living Allowance (Relief) Act, 1973.

    It has also repeals the Sindh Employees Special Relief Allowance, 1986 and the Sindh Payment of Dearness Allowance to Certain Employees Act, 1991.

    Its provisions affecting several laws have to be carefully perused by us and would give our further comments accordingly.

    6-    The Sindh Employees Social Security Act, 2016.

    i)    It repeals application to Sindh of the Provincial Employees Social Security Ordinance, 1965. It appears to grab as much money as possible without specifically mentioning increase in the benefits to the employees.

    ii)    Section 2(32) mentions about the Federal Minimum Wages Ordinance, 1961 which is no longer applicable in Sindh.

    iii)    Section 2(23). There is no Provincial or Federal Trade union Act, 1926 as section 2(23) mentioned therein.

    iv)    The most objectionable and controversial is Section 75 of the Act, which has also been included in Section 2(a)(e) of the Act, and Section 2(27) providing the self assessment scheme connected with revised wages in January every year under Section 75 of the Act, and Section 2(32) about Wages wrongly mentions the Federal repealed Minimum Wages Ordinance of 1961 in Sindh. Section 21(3) also provides Rs. 40/= pm employee’s contribution under the self assessment scheme which the employees will resist and thereby sabotaging the self assessment scheme.

    v)    Section 20 of the Act provides payment of contribution under the Act at the rate “6% percent” but it does not mention 6% of What? The provision under it again mentions the controversial Section 75 of the Act, which provides review of monthly wages for contribution every year in January reproduced as under-

    Section 75. Review and modification of wage limits, contribution and benefits.—

    In January of each year, the Governing Body shall review the wage limits specified in clause (e) of sub-section (9) of section 2 and the rates of contribution and benefits provided under this Act in the light of any changes in wage levels or living costs and shall submit a report thereon together with its recommendations to Government.

    (2) Government may, after considering the said report and recommendations, by notification in the official gazette, enhance or reduce the wage limit specified in clause (f) of sub-section (8) of section 2 or the rates of benefits payable under this Act.

    vi)    Unless the new constituting Governing Body u/s 75 of the Act not decides and notifies in the Gazette the new rates of Contribution, in our opinion employer shall pay 6% of contribution on old rates up to Rs. 10,000/= wages per month per employee till new notification under Section 75.

    vii)    It mentions about Section 2(8) (f) of the Act but there is no such provision in the Act.

    viii)    This increase could be made by Departmental action as per their choice without amending the Act keeping door open for misuse/corruption.

    ix)     Section 36 pertains about sickness and several others from Sections 36 to 48 relating to the benefits under the Act which need to be carefully compared with the provisions under the Federal Employees Social Security Ordinance, 1965.

    x)    It appears that the Act has been made in a hot haste due to which there are several defects and controversial provisions under the Act.

    xi)    Section 61(2) of it provides new provision to deposit 25% of the contribution along-with application made before the Commissioner Social Security which is difficult to meet by smaller employers beside it could also be misused against the employers.

    xii)    The Schedules to the Act require to be diligently perused to find out differences in this law and the Federal Social Security Ordinance, 1965.

    xiii)    It provides by Section 85 supersession of Workmen’s Compensation Act, 1923, Employers Liability Act, 1938, Mines Maternity Benefits Act, 1941, W.P. Maternity Benefits Ordinance, 1958 and it’s Section 86 repeals application of the Federal Employees Social Security Ordinance, 1965 to the province of the Sindh.

    1. The Bills of the Sindh EOB (Amendment) Act, 2016 and the Sindh Bounded Labour system and (Abolition) Act, 2015 pending assent of the Governor Sindh.

    You are requested to carefully peruse the provisions of these Sindh Acts and may consult your Labour Consultant on the matter.

    For M/s S. M. Yaqoob


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