Labour codes?

The drafts of the Sindh and Punjab labour codes have been prepared by the respective provincial governments with assistance from representatives of the International Labour Organization (ILO). The codes are purported to have consolidated 20 labour laws inclusive of the prominent legislation.

The labour federations in both Sindh and Punjab have strongly criticized and opposed the implementation of these codes for streamlining the system of third-party contract workers and fixed-term contracts. While they have been demanding the altogether abolition of this system, the codes tend to regularize them with some conditionalities.

According to ILO representatives, the draft codes have followed emerging international practices in permitting third-party contracting and fixed-term contracting only as long as it is genuine and limited in duration and extension. They have made special provisions for ‘gig’ workers -- independent contractors or freelancers, who typically do short-term work for multiple clients.

As the contracting out of jobs and services is an international phenomenon, a key ILO recommendation states that the reality is more important than contractual clauses. They have therefore based their provisions on the following four principles, which are quite realistic.

One, a business should be recognized as an employer if the workers it uses are in fact under its control. Two, third-party contract workers should receive the same entitlements as employees of the user business. Three, if a user business engages third-party contract workers to perform ongoing work, the workers should be deemed to be its direct employees. Four, fixed-term contracts should not be used where the work is of a permanent nature.

The above-mentioned principles have also been laid down in various judgments of the Supreme Court given from time to time. In this context the services of the petitioner workers purported to be in the employment of contractors, were regularized with the principal employer.

Starting with the landmark judgment of 2013 in the case of Fauji Fertilizer Company, it was followed by judgments in the cases of the National Bank of Pakistan in 2018; State Oil Company Limited in 2018 and recently that of IFFCO Pakistan (Private) Limited.

Nevertheless, there are exceptions in Pakistan in the third-party contract system relating to the security services and services contracts such as housekeeping, gardening and catering etc. Although these services are of a permanent nature, they don’t fall within the category of core businesses of companies and may be contracted out without any legal implications.

Besides, the Private Security Companies Ordinance, 2001, exclusively relates to the licensing of companies to provide security services to their clients. But this ordinance does not exempt the companies from implementing the minimum wages and provision of other benefits as guaranteed under the law.

The system of engaging third-party contract workers has been in existence since the inception of industries in Pakistan. However, the labour federations want to get it abolished with the absorption of such workers by the principal employers. They say that implementation of the codes will not be acceptable to them unless it is discussed in a tripartite forum.

On the other hand, there are numerous issues relating to the codes from the employers’ perspective. In the present industrial environment, there are so many issues confronted by personnel managing human resources that knowing labour laws is not their priority. Under these circumstances, expecting them to implement a set of extremely complicated and confusing labour laws, compiled in the form of these codes will not be wise.

This view may be judged from Section 143 of the codes relating to ‘Internal Work Regulations’ and contained in the chapter on ‘Employment Contracts and Termination’ of Draft #3. It requires that an employer adopt and publish internal work regulations for regulating remuneration, work organization, occupational safety and health, and other issues important for employees.

The internal work regulations contain ten key contents, of which nine are already provided in the existing laws and mostly relate to disciplinary issues. When these provisions have already been implemented successfully by progressive employers for more than five decades, why would they be required to start from scratch?

Regulation (3)(b), states “discipline at the workplace, including acts and omissions such as attendance and late coming”. Habitual absence without leave and habitual late attendance constitute misconduct under the existing law. Should we treat them with leniency in the regulations and let chronic absenteeism prevail in the organization?

Similarly, inefficient, dilatory, careless or wasteful working constitutes misconduct if repeated frequently. Should we continue to ignore these delinquencies till the incumbent causes bad influence over his colleagues and they also start doing the same?

The draft of the proposed internal work regulations will be consulted by the employer with the collective bargaining agent (CBA). On reaching an agreement between the employer and CBA, the employer shall send them to the chief inspector for approval, along with a copy of the agreement signed between the parties. If the inspector is not satisfied with the contents of any proposed regulation, s/he will instruct the employer to revise and resubmit it.

There are several other provisions, which will not facilitate the employers in smooth implementation of the laws but add to their miseries. The labour federations have rightly proposed to first review these codes with the stakeholders before implementation.

The writer is a consultant in

human resources at the Aga Khan

University Hospital. He can be reached at: parvez.rahim1947@gmail.com