Oh, Conventions! They’re quite the phenomenon, aren’t they? Dictated by the International Labour Organisation (ILO), these little pieces of paper outline the principles of rights at work and set the bar for all of us drones, I mean, hardworking employees. For example, the ILO Convention No. 1 of 1919 on working hours established the sacred standard of a maximum of 48 hours per week and 8 hours per day.
Fast forward over a hundred years and what do you know, the standard still stands, unchanging, unyielding, and unquestioned. Sure, companies may choose to reduce the number of working hours, but they still have to abide by the grand poobah of working hours set forth by the ILO.
Did you know that the ILO has formulated a total of 190 conventions to date? Pakistan, being the responsible and compliant member of the international community that it is, has ratified 36 of these, with 30 in force. Once a country ratifies a convention, it is obligated to implement it, which is a fancy way of saying, “Comply or else.”
Thanks to devolution, each province is now free to follow the conventions ratified by the federation, as long as their amendments or new labour laws align with the basic principles laid down in the conventions. And what fun would it be if the provinces didn’t differ in their labour laws? The devolution process began in 2014 with Sindh taking the lead, followed by Punjab and KP, who were a little late to the party.
Sindh took full advantage of its newfound freedom and made considerable changes to its devolved laws, including the Sindh Employees’ Old-Age Benefits Act, 2014, and the Sindh Companies Profits (Workers’ Participation) Act, 2015. The other provinces, however, chose to hold back on devolving these laws, fearing that the administration would eventually end up back in the hands of the central government.
Labour laws in Pakistan have been a point of contention for years, with the provinces enjoying the advantage of providing increased benefits to workers without prior consultation with employers, who are expected to bear the cost. This situation is compounded by the country’s low levels of worker productivity, with labour productivity 20% lower in Pakistan than in India and 91% lower than in China.
The Ministry of Inter-Provincial Coordination is tasked with aiding both provincial and federal entities in having a uniform approach towards policy formulation and legislation. However, the lack of coordination among the provinces has led to disparities in labour laws, resulting in confusion and inefficiency.
For instance, holidays and leave per annum under the Factories Act vary greatly across the provinces. In Punjab and KP, annual holidays are 14 days, with 10 days of casual leave and 16 days of sick leave at half pay. In contrast, Sindh offers the same holidays and leave at full pay. Balochistan goes even further, offering 20 days of annual holidays, 15 days of casual leave, and 20 days of sick leave. This increase was allowed during the Covid-19 pandemic, when industrial output was down.
The maternity leave benefit is another area of disparity among the provinces. In 1958, the West Pakistan Maternity Benefit Ordinance fixed the quantum of maternity leave at 12 weeks, which remains the same in Punjab and KP. However, Sindh has increased it to 16 weeks, while Balochistan offers 14 weeks.
The amount of overtime work permitted per annum is also not uniform across the provinces. Under the Shops and Establishments Act, the limit is 624 hours in Punjab and Balochistan, but only 150 hours in Sindh. KP has a more practical approach, limiting the total number of overtime hours worked by an employee to 24 in a week.
The Industrial and Commercial Employment (Standing Orders) Acts of Punjab, Sindh, and KP require one month’s notice for terminating a permanent worker’s employment for any reason other than misconduct. However, Balochistan has increased this to three months. The calculation of gratuity, a terminal benefit paid to employees leaving a company, is also different across the provinces. In Punjab, Sindh, and KP, gratuity is calculated as one month’s gross salary for every completed year of service. This amount has been increased to two months’ salary in Balochistan.
Finally, the definition of a contract worker varies greatly across the provinces. Sindh defines it as a worker who works on a contract basis for a specific period, but excludes third-party employment. Punjab calculates the remuneration of contract workers on a piece-rate basis, while Balochistan limits the maximum length of a contract to 12 months after which the worker acquires the status of a permanent worker. KP has a more straightforward definition, stating that a contract worker is someone who works on a contract basis for a specific period mentioned in the contract.
In conclusion, the disparities in labour laws among the provinces have resulted in confusion and inefficiency. The lack of coordination among the provinces and the federal government has led to a situation where employers are expected to bear the cost of increased benefits for workers, despite low levels of worker productivity. The Ministry of Inter-Provincial Coordination must take a more active role in promoting a uniform approach towards policy formulation and legislation, to ensure that labour laws are fair and equitable for both workers and employers.
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