FederalLabour LawsComments on IRA, 2008

November 29, 20080

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Date: 29-11-2008

Circular Number: C-115

Comments on IRA, 2008

After the Senate, the National Assembly also passed the Industrial Relations Act, 2008 and with assent of the President it becomes law of the land. Mainly due to criticism by the workers / Unions against IRO, 2002, the Act has incorporated most of the provisions of IRO, 1969. No comments are given on the provisions of IRO, 1969 and IRO, 02 incorporated in the Act or where there is no change in any provision of IRO, 69 and IRO, 02 incorporated in the Act. Our comments on salient features of the Act are given below:-

1. It has been announced by the Minister in the National Assembly that Senate has passed the Act for 1½ years and by that time it would be replaced by another Act which is strange. It took 8 months to pass the Act in which all aspects should have been included with due care and diligence. Another Act before 1½ year would bring more confusion and controversies. There are already some objections from the unions / workers against the Act from its start.

2. Our Circular No.114 dated 07-1-2008 gives the corresponding provisions in IRO, 69, IRO, 02 and this Act at a glance for easy understanding which may be carefully perused and those interested may download from our website. www.smyaqoob.com.

3. Section 1 (f) IRO, 02 EOBI withdrawn and Section 2 (d) P.T.V not exempted.
( i ) Section 1 (f), IRO, 02 withdrawn thereby – exemption of EOBI withdrawn
( ii) Section 1 (d), IRO, 69 exemptions of P.T.V. and Pakistan Broadcasting Corp. withdrawn.

4. ( i ) Section 2 (viii) of Act employer – same as Section 2 (x), IRO, 02 but provision of Section 2 (x) (f), IRO, 02 regarding contractor withdrawn.
( ii ). Section 2 (xi) – establishment – instead of IRO, 1969, IRO, 02 retained according to which Cos. / organizations having branches / depts. at several places which may be in one or more than one province, if there is common balance sheet and profit and loss account all together are to be treated as one single establishment. This would increase industry wise-trade unions and reduce local trade unions and instead of the provisional Registrar, the NIRC shall act as Registrar for such Unions for various matters such as registration, determination of CBA, etc.
( iii ). Section 2 (xiv) – industry IRO, 69 retained and IRO, 02 not retained which excluded any charitable establishment operating through public or private donations.
( iv ). Sections 2 (xx vii) trade union – IRO, 69 included.
( v ). Section 2 (xxix) – worker – IRO, 69 retained but supervisors and apprentices have been clearly included as workers.
5. Section 3 – Trade Unions & Federations – IRO, 69 retained.

6. Section 6 – Requirements of application – IRO, 02 retained.

7. Sections 7 – Requirements of registration: – IRO, 02 included with change the limit of 1/5th of IRO, 69 retained instead of 1/4th IRO, 02 for registration of union where 2 or more unions have already been registered.

8. Section 10 – Registration – IRO, 69 retained.

9. Section 13 – Cancellation of registration – IRO, 69 taken and not IRO, 02 which had some different provisions.

10. Section 18 & 19 – Unfair Labour Practice – almost the same in all the three.

11. Section 25 – CBA – Section 22, IRO, 69 incorporated and the controversial provision of Section 20 of IRO, 02 not incorporated.

12. Sections 26 to 32 – NIRC – Same as IRO, 69 and controversial provision, under Section 49(4) (e), IRO, 02 of restriction regarding not granting interim stay / injunction removed.

13. Sections 33 & 34 – Same as Section 23, IRO, 69.

14. Sections 35 to 39 of the Act are the same as section 23-B to 23-F of IRO, 69. Once again provisions of Section 23-B and Section 23-C of IRO, 69 about workers participation and Joint management board, not included in IRO, 02 have been taken in the Act to create unnecessary complication as these bodies have no powers to take decision and their functions are only paper functions and waste of time when in all the three laws Work Council having similar functions fulfils the same requirement.

15. Sections 40 – 41 – Works Council – Same as Section 24 & 25, IRO, 69.

16. Section 42 – Same as Section 25 – A, IRO, 69. The main grievance against Section 46, IRO, 02 has been removed by incorporating the provisions of Section 25-A in it but in addition to one year conviction increase in fine under its Sub – Section (6) from one thousand to Rs.50,000/= or punishment or both is too high by all standards as there are innumerable small establishments and some employers are merely self-employed owners themselves working alongwith their few workers cannot afford it. There may also by violation of decision by the workers.

17. Section 43 replaced by Section 26 of IRO, 69 in the Act and so also Sections 44 to 52 of the Act are the same as Sections 27 to 43 of IRO, 69. Section 44 (2) provides the Federal Govt. to appoint conciliators in disputes NIRC having Jurisdiction to adjudicate.

18. Sections 53 to 55 of the Act pertain to the Labour Court which are the same as Sections 35 to 37 of IRO, 69 but provision of compensation in lieu of reinstatement provided by IRO, 02 Section 46 (5) withdrawn.

19. Section 56 of the Act restores the Labour Appellate Tribunals, instead of appeals in the High Courts, the provisions of Section 38, IRO, 69 have been included but under Section 56 (b) the tribunal may punish for contempt of it’s own and Labour Court and Section 56 (7) provides imprisonment for any period and any amount of fine and only when fine exceeds Rupees Fifteen Thousand appeal may be preferred in the High Court. This punishment and fine are too much and even in High Courts and the Supreme Court in contempt cases if the contemnor tenders unconditional apology he is let off with a warning.
Our comments dated 04-11-2002 (Circular No.90 dated 04-11-2002), when IRO, 02 abolished Tribunal and provided appeals to the High Court are reproduced below:-

“There was no provision of appeal against the Award of the Industrial Tribunals of individual persons appointed for every industrial dispute under the Industrial Dispute Act, 1947 inherited by Pakistan and Writs were filed against the same in the High Courts. Then there was no provision of individual grievances. This Act was repealed by the Industrial Disputes Ordinance, 1959. Industrial Courts were created under Industrial Disputes Ordinance, 1959 with no provision of appeal due to which only Constitutional Petitions were filed in High Courts against its awards/decisions. Later on by amendment of 1962 in the Ordinance appeal against the award of the Industrial Court was provided to the High Court. Such cases were much delayed in the High Courts. This Ordinance of 1959 was repealed by the West Pakistan Industrial Dispute Ordinance, 1968 and so was done by the East Pakistan by its similar Ordinance.

Industrial Courts were also created under the West Pakistan Industrial Disputes Ordinance, 1968 and to avoid the above delays in the High Court, the West Pakistan Industrial Appellate Tribunal was created where the appeals were filed. When Industrial Relations Ordinance, 1969 repealed this law, learning from the past experience it also retained the same system with change of name to Labour Court and Labour Appellate Tribunal. India too by amendments in their said Act of 1947 created Labour Courts and Labour Appellate Tribunal. The earlier pending cases in the High Courts continued even after repeal of these laws.

In between redress of individual grievances were provided to go to Industrial/ Labour Court by the repealed Standing Order 18(b) and later on by Section 25-A, Industrial Relations Ordinance, 1969.

Till able bodied retired High Court Judges were appointed as the Chairman of the Tribunal, there was no grievance from any side but the problem was created by appointing senile retired High Court Judges as Chairman of the Tribunal even over 70 years of age with deteriorated faculties. To avoid this it was suggested that sitting Judges of High Courts be appointed as Chairman of the Tribunal for specified period in rotation but abolishing Labour Appellate Tribunals and providing appeals to the High Court was not demanded and it is not at all desirable as the High Courts are already over burdened with cases and appeals of the labour cases would be additional cases/appeals like appeals under other laws going to the High Courts and the same would be lost in ocean of cases in the High Courts. It may be noted that appeals in the High Courts under Section 64, P. Employees Social Security Ordinance, 1965 are already similarly delayed. Even if some priority is given to the appeals of the labour cases by putting early in its cause list alongwith other cases, due to the large number of cases in High Courts the cases of Regular/Final Hearing are not often reached and adjourned as the cases of Orders, Katcha Peshi and Hearing of miscellaneous applications large in number consume much time of the Hon’ble Judges of the High Courts.

The problems faced by the parties in the High Court in routine office matters and other formalities would be far greater. It is unfortunate that we have not learnt lesson from the past and hastily abolished the Labour Appellate Tribunals but very soon there will be hue and cry to restore the Labour Appellate Tribunals”.

It happened exactly the same way by restoring again the Tribunal as we are not prepared to learn lessons from the past.

20. Sections 38-A to 38-I of IRO, 69 being the provisions regarding wage commission for banks have again been eliminated from the Act as was done in IRO, 02 and CBA unions there have to follow the same procedure of demands as other unions.

21. Sections 57 to 72 of the Act are same as Section 39 to 52 of IRO, 69.

22. Sections 73 to 82 of the Act are regarding offences under the Act, providing fines which like IRO, 02 not treating the workers and employers as criminals and high amount of fines have been provided the details of which may be perused from Sections 73 to 82 of the Act.

It is good to see that in these provisions emphasis is not on the punishment of imprisonment but fines to reform both the sides. The workers and employers are not criminals, they some times make mistakes which technically become offences under these provisions and, therefore, they should not be treated as ordinary/normal criminals but emphasis should be on providing deterrent to reform them. Sentences of imprisonment not provided are, therefore, a welcome change.
The fines are too high. The workers cannot pay high fines upto Rs. 20,000/-, 40,000/- or Rs. 50,000/- provided by some of these Sections. There are large numbers of small establishments functioning with meager resources in rented premises and in fact they are self employed persons and also employ some workers in their establishments and such employers also cannot pay high fines.
These provisions are silent as to what would happen if any person is unable or fails to pay the fine imposed on him. We fail to understand as what is intended to achieve by such heavy fines. Is it a method to collect funds? We strongly feel that amounts of fines provided are not realistic and the same need to be revised as soon as possible, if the principal to reform both the sides is really intended.
23. Sections 83 to 86 correspond to Sections 65 to 66 of IRO, 69 and Section 88 to Sections 67 of IRO, 69 and Sections 88 to 89 of the Act to Sections 80 to 82 of IRO, 02 and instead of two schedules the Act has retained only Schedule regarding public utility services.

We realise in difficulty to fully grasp the above technical comments when three parallel laws are involved. These comments would be useful to those who have some legal background. This circular is also available on our above website and may be downloaded from it.


For M/s S. M. Yaqoob


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