LABOR LAWS

BY Soofi29

Soofi & soofi Management Consultants

Stereotypical Practices of Personnel Management and Human Resource Management

Approaches of Approaches to
Time ad planning perspective

Personnel Management
Short-term Reactive Ad-hoc Managerial Compliance External Controls Pluralist Collective Low trust Bureaucratic Centralized Defined roles Specialist and / or Professional

Human Resource Management

Long-term Proactive Strategic Integrated Commitment Self-Control Unitarist Individual High trust Organic Devolved Flexible roles Largely integrated into line management

Psychological Contract Control Style Employee relations perspective Preferred structures / systems Roles

Evaluation Criteria

Cost-minimization

Maximum utilization human asset accounting

Life Cycle Stages

HR Function

Start-up

Growth
Maintain labor peace and employee motivation and moral

Maturity

Decline

Labor Set basic Employee employee Relations relations Philosophy and Organization

Control Maintain labor costs labor and peace maintain labor peace. Improve productivity

Source: Storey Sisson (1993,p.61), adapted from Kochan and Barocci (1985,p.104)

Legislation
1. Factories Act, 1934 / Payment of Wages Act. 1936 6. Industrial Relations Ordinance, 2002

7. Punjab Fair Price Shop 2. Apprenticeship ordinance, (Factories Ordinance, 1962 1971)

3. Provincial Employees Social Security Ordinance 1965 4. Standing Orders Ordinance, 1968 5. Companies Profits (Workers Participation) Act, 1968

8. Cost Of Living Relief Act 1973. 9. N.I.R.C. 1973.

10. Employees Old Age Benefit Act 1976.

Factories Act
1. Occupier Owner Ultimate Control Factory Manager Design: 2. Notice to inspector: Form-A (Rule-3) Name Of Factory- its situation-Nature Of Manufacturing. 5. 3. Health and Safety CleanlinessVentilation and Temperature: Circulation of Fresh Air-Temperature 6. reasonable. Over Crowding- 500 cft 7. Light Drinking Water-250-cooling and Urinal (Separately for Male / Female)-Spittoons-Periodical Medical-Checkup (July-Jan-Hygiene Card) Compulsory Vaccination Welfare Officer (Not Less than 500 Workers) Precaution Against Fire. 4. Working Hours (Weekly) Max: 48/Week-Daily 9 Hours Max.

Interval for Rest: Half an hour (Five hours working, One hour (After six hours working) Extra Pay Overtime: Twice ordinary rate of pay Holiday with Pay: Weekly Rest Annual 14 Consecutive Days (12 Months Continuous Service). Casual - 10 Days Sick - 16 Days / Half Pay Festival - As notified by Govt.

Standing Orders Ordinance-1968

APPLIES:-20 Or More Wokmen
Classification of Workman
Permanent _ Nature Of Work Permanent. Probationer _ Provisional,Permanet Vacancy. Badli_ Temporary Absent. Temporary _Work Temporary Nature Apprentice_ Ordinance,1962

Group Incentive Scheme

Group Insurance Bonus 10 - C Gratuity Misconduct Dismissal

W.P. Industrial & Commercial Employment

(Standing Orders) Ordinance 1968
Applicability Applicable to all industrial and commercial establishment employing 20 or more workmen on any day during the preceding twelve months. However for smaller industries establishments employing between 20 to 49 workman on any day during the preceding twelve months four exemptions form the application of S.O 10-B,11,12(6) and (8), 15 have been granted, once the number of workmen is at 50 or more in any industrial establishment employed on any day of the preceding twelve moths, all provisions of the ordinance are applicable without any exception. S.O.10-B S.O.11 S.O.12(6) & (8) S.O15 Compulsory Group Insurance. Stoppage of Work / Lay off. Payment of Gratuity Punishment From Misconduct, Enquiry Procedure, Disciplinary Actions (Final / Dismissal)

Cont..

W.P. Industrial & Commercial Employment

(Standing Orders) Ordinance 1968
[10-C. Payment of Bonus:(1) Every employer making profit in any year shall pay 2[for that year within three months of the closing] that year to the workmen who have been in his employment in that year for a continuous period of not less than ninety days a bonus in addition to the wages payable to such workmen.
(2) The amount of the bonus payable shall (a) If the amount of the profit is not less than the aggregate of one months wages of the workmen employed, be not less than the amount of such aggregate, subject to the maximum of thirty percent of such profit;

Cont..

W.P. Industrial & Commercial Employment

(Standing Orders) Ordinance 1968
3[Illustration

1.-- If the profit is Rs. 1,20,000.00 and the aggregate of the workmen is Rs. 30,000.00, the amount of bonus payable shall be not less than the aggregate of one months wages, that is to say, Rs. 30,000.00

Illustration 2.-- If the profit is Rs. 30,000.00 and the aggregate of one months wages of the workmen is also Rs. 30,000.00, the amount of bonus payable shall be not less than the thirty percent of the profit that is to say, Rs. 9,000.00].
(b) If the amount of the profit is less than the aggregate of referred to in paragraph (a), be not less than fifteen percent of such profit.

Misconduct

Something done or omitted to be done, which a man of Ordinary prudence would not have done or would not have omitted to do. Applicable: (S.O-15) General terms-20 or more workers commercial-20 or more.Industrial-50 or more. Compliance mandatory. Jurisdiction of Labour Court-Fair Enquiry.Punishment-quantemcommensurate with nature of fence. Where Law not Applicable-natural Justice not to be condemned unheard whether a legal provision or not (S.C).

The following Acts and Omission shall be treated as misconduct

a)

b) c) d) e)

Willful insubordination or disobedience, whether alone or in combination with others, to any lawful and reasonable order of a superior. Theft, fraud, or dishonesty in connection with the employers business or property. Willful damage to or loss of employers goods or property. Taking or giving bribes or any illegal gratification. Habitual absence without leave or absence without leave for more than ten day.

f) Habitual late attendance. g) Habitual breach of any law applicable to the establishment. h) Riotous or disorderly behavior during working hours at the establishment or any act subversive of discipline. i) Habitual negligence or neglect of work.

J) Frequent repetition of any act of omission.

k) Striking work or inciting others to strike in contravention of the provision of any law, or rule having the force of law. l) Go slow.

Other Provisions
4) No Order of dismissal shall be made unless the workman concerned is informed in writing of the alleged misconduct within one month of the date of such misconduct or of the date on which the alleged misconduct comes to the notice of the employer and is given an opportunity to explain the circumstances alleged against him. The employer shall institute independent inquiry before dealing with charges against a workman. Provided that the workman proceeded against may, if he so desires for his assistance in the enquiry, nominate any workman employed in that establishment and the employer shall allow the workman so nominated to be present in the enquiry to assist the workman proceeded against and shall not deduct his wages if the enquiry is held during his duty hours.

5)

Where, for the purpose of conducting an inquiry into the alleged misconduct of a workman, the employer considers it necessary, he may suspend the workman concerned for a period not exceeding four days at a time so, however, that the total period of such suspension shall not exceed four weeks except where the matter is pending before an Arbitrator, a Labor Court, Tribunal or conciliator for the grant of permission Under Section 40 of the Industrial Relations Ordinance 2002. The order of suspension shall be in writing and may take effect immediately on delivery to the workman. During the period of suspension, the workman concerned shall be paid by the employer subsistence allowance of not less than fifty percentum of the wages. If the workman is found not guilty, he shall be deemed to have been on duty during the period of suspension and shall be entitled to the same wages as he would have received if he had not been suspended.

Enquiry

Explanation considered unsatisfactoryformal enquiry. Refusal to submit explanation-proceed. Notice-name of E.O, date, time, venue, charge sheet reference. Attendance inability-change date by E.O. Nominated workman employed-charges fully explained statement recorded/signed.

Enquiry
Other Points E.O senior-subordinate to punishing authority. No ground-change of E.O-not necessary to grant- Assistance of other workmen-can not act legal representative-nor xxxxxx prosecuiton.Produce defence-accusedrequest summon-accede.

Evidence

Confined to issue-hearsay-best evidencebeginning prosecution statement xxxxx all question-no-relevant only-no xxxxrecord.Defence statement-production of documents-findings-state facts-sum upcorraboration (1971 PLC 148)-reasoning-not justified recommendations-Employer approvalsupply copy of enquiry report(1972 PLC 327) supply prceedings(1972 PLC 392)

DISMISSAL PROCEDURE
For misconduct by an employee the following four steps procedure for dismissal from service S.O. 15(4) Charge sheet, explanation of the workman, independent inquiry, and award of punishment is compulsory:I. Written notice of alleged misconduct (charge-sheet) is given to a workman within one month. An opportunity is to be given to the workman to explain or respond to charges against him.

II.

III.

If employer is not satisfied with the explanation, he may suspend the workman and shall institute independent inquiry by appointing an Inquiry Officer to objectively determine whether the workman is guilty or not. Employer includes the manager as per section 2(c). If the workman is found guilty of misconduct in an inquiry report the employer can award punishment ranging from fine to dismissal. Approval of the employer is take in every case of dismissal. Where this four-steps procedure is not adopted it will amount to contravention of the provisions of the Ordinance

IV.

Industrial Relations Ordinance-2002

Collective Bargaining Agent:-Trade Union-u/s 20. Conciliation:-Proceedings before conciliator. Illegal Lock Out:-Otherwise than in accordance with I.R.O Provisions. Illegal Strike:-Otherwise than in accordance with I.R.O Provisions. Industrial Dispute:-Means any dispute or difference between employers and workmen or between workmen and workmen which is concerned with the employment or Non-employment or the terms of employment or the conditions of work,and is not in respect of the enforcement of any right gauranted or accrued to workers by or under any law,other than this ordinance or any award or settlement for the time being inforce: Lock Out:-means closing of a place of employment, partly or wholly. Settlement:-Arrived at as a result of conceliation proceedings.

Trade Unions

Trade Unions and Freedom of Association-Art:17 of the constitution of the Islamic Republic Of Pakistan. Application for Registration:-President and General Secretary may apply duly signed. Requirement (a) Name Address- of Union (b) formation date (c) Titles, Names, Ages, Addresses and Occupation office bearers. (d) Total Membership (e) Name Of Establishment (f) Other Trade Union Registered in the establishment. (g) Three copies Union constitution with resolution authorizing P/G.S. to apply.

Change Industrial Relations Ordinance

1969 Vs 2002
1. Definition of workman Supervisors not exempted New Job Description 2. Affiliation of CBA with Federation Registered with NIRC 3. Establishment One Unit 4. Job Contract and Manpower Supply Contract 7. 8. 9. Registered Cancellation of Inactive Union Reinstatement Compensation High Court Stay J.W.C (10 Members) 40%-60% 9.1 - Productivity 9.2 - Min: Facilities Contractor Labor 9.3 - Bilateral Negotiation 9.4 - Safety & Health

5. Disqualification Theft, Physical Assault, Murder

6. Tenure of CBA Three Years

10. The commission (NIRC) shall not grant interim relief against any action mentioned in Section 63(d) of this Ordinance, (dismiss, discharge transfer etc).

Industrial Relations Ordinance 1969

Worker and Workman
Worker and workman means any person not (including employment [as a supervisor or] as an apprentice) in an establishment or industry for hire or reward either directly or through a contractor whether the terms of employment b express or implied, and for the purpose of any proceeding under this Ordinance in relation to an industrial dispute includes a person who has been dismissed, discharged, retrenched, laid-off or otherwise removed from employment in connection with or as a consequence of that dispute or whose dismissal, discharge, retrenchment, lay-off, or removal has led to that dispute [but does not include any person a) Who is employed mainly in a managerial or administrative capacity, or

b)

Who, being employed in a supervisory capacity draws wages exceeding rupees eight hundred per mensem or performs, either because of the nature of duties attached to the office or by reason of the powers vested in him, functions mainly of managerial nature]

Cont..

Industrial Relations Ordinance 2002

Worker and Workman
Worker and workman means any person not falling within the definition of employer who is employed in an establishment or industry for remuneration or reward either directly or through a contractor, whether the terms of employment be express or implied, and for the purpose of any proceeding under this Ordinance in relation to an industrial dispute includes a person who has been dismissed, discharged, retrenched, laid-off or otherwise removed from employment in connection with or as a consequence of that dispute or whose dismissal, discharge, retrenchment, lay-off or removal has led to that dispute but does not include any person who is employed mainly in a managerial or administrative capacity.

Management / Administration
In practice, the term management and administration are interchangeable, in recognition of the responsibility of mangers and administrators to plan, organize, direct and control the activities of those who make up the work team.

Administrative Functions

Transport Canteen Horticulture Janitorial services Procurement, supply & distribution of materials e.g. stationery Management of services Maintenance of building & equipment Receipt & dispatch of mail Managing budget for the above.

Management Functions

Planning Organizing Directing (Leading) Staffing Controlling Manager: The one who undertakes the task and functions of managing at any level in any kind of enterprise.

Functions Held of Supervisory Nature

1. Appraising performance of 5. subordinate, granting leave and recommending increments (1979 PLC 279-H.C) Sanction leave, issue charge sheet and recommend cases (1984 PLC 465-Tribunal)

2. Recommending leave, punishment 6. Supervising the process to ensure and other actions for and against that the same is done technically workers (1971 PLC 196-Labor correct (1990 PLC 423 Tribunal) Court) 3. Recommending leave, issuing or charge sheet and transfer of workers (1981 PLC 625 Tribunal) 7. To sanction or recommend leave, to recommend increment and to make a report (1990 PLC 693Tribunal) 8. Application of mind and supervision of work done by other (1992 PLC 154-Tribunal)

4. Guiding subordinates (PLJ 1981 Tr. C274-Tribunal)

Industrial Relations Ordinance 2002

1. ESTABLISHMENT 2. INDUSTY SECTION 2 (XVI) Industry means any business, Establishment means any office, trade manufacture, calling, firm, society, undertaking, service, occupation or company shop or enterprise employment engaged in any which employs workmen directly organized economic activity of or through a contractor for the producing goods or services for purpose of carrying on any sale, excluding those setup business or industry and includes exclusively for charitable all its departments and branches, purposes, operating through whether situated in the same public or private donations place or in different places where charitable purpose having a common balance sheet includes provision of education, and profit and loss account, and medical care, emergency relief except in section 54, includes a and other needs of the poor and collective bargaining unit, if any, indigent. constituted under that section in any establishment.

I.R.O. 2002
Disqualification for being an officer of a trade union

Notwithstanding anything contained in the constitution or rules of a trade union, a person who has been convicted or any offence under Section 70 (for embezzlement or misappropriation of trade union funds) or of a criminal offence of heinous nature within the meaning of Pakistan Penal Code such as theft, physical assault, murder, attempt to murder etc shall be disqualified from being elected as, or from being a member or office bearer of a trade union.

Industrial Dispute
Means any dispute or difference between employers, and workmen or between workmen and workmen which is concerned with the employment or non-employment or the terms of employment or the conditions of work; and is not in respect of the enforcement of any right guaranteed or accrued to workers by or under any law, other then this ordinance, or any award or settlement for the time being in force;

Influence on Labor Management Relations

EXTERNAL

Market Trend (National International)

Competitiveness
Legislation on Labor Laws

Govt. Policies
I.L.O. Conventions

INTERNAL

Climate
Mutual Trust and Confidence

MAJOR INFLUENCE
Labor Laws
Legislation by Government I.L.O. Conventions

Key factors which have played a dominate role in the evolution of industrial relations practices, polices and systems in various types of industrial enterprises within the country:

Labor Laws Case Law

Government Labor Policy

Managerial Styles Work Attitudes and Role Played by Unions

Type of Industry

LABOR LAWS
Since early seventees, most of the amendments carried in labor laws and enactments introduced, have been due to political expediency. Apart from causing difficulties, they have been hardly of any use to the employers. Resultantly, total compliance with these laws is neither practical nor possible.

CASE LAWS
The decisions given by courts are equally important in influencing the industrial relations policies and environment of undertakings. At times these have the potential of making or breaking an industry. A ruling, which is unfair to employers or creates further complications for them, will adversely affect the industrial relations.

GOVERNMENT LABOR POLICIES

The reluctance on the part of government to effect realistic changes in the labor laws send negative signals to the employers. They tend to believe that such laws will continue to pile up and while implementing they will have to mould them to suit their own convenience.

MANAGERIAL STYLES
They vary in a family enterprises, a multinational company and a state enterprise. Even in a family enterprise it may vary from a paternalistic approach to a strict disciplinarian style. In a multinational company, management will strictly abide by their laid down principles but remain within the framework provided by laws of the land. In most of the state enterprises, managements are subdued and unions are supreme. They get equal share in running the affairs of a factory and become instrumental in its doom

WORK ATTITUDE AND ROLE PLAYED BY UNIIONS

There is in fact an element of reciprocity between these and the managerial styles. The attitude of workforce towards and role played by their unions flows from the managerial style. In a professionally managed organization, the output of workers will be high. The workers will believe that management will never give in on principle. They will respect their superiors and will feel pride in obeying their instructions. This attitude of workers and ultimately their unions will be reversed in an organization run by managers lacking in competence and integrity.

TYPE OF INDUSTRY
It is unfair to believe that the behavior of employees in a high tech chemical plant and a textile or re-rolling mills will be similar. Nevertheless, the aggression in behavior of workers in difficult and strenuous work processes, may be reduced by improving their working conditions.

CONCLUSIONS

Legal Framework

Communication
Problem Solving

Welfare
Mutual Trust / Confidence

Provincial Employees Social Security

Applies: Notified ( Service of state , A. Forces , police, local bodies , excluded) Benefits : Sickness: A condition requires / necessitates medical treatment and absenteeism from work. Maternity : Twelve weeks, not more than six weeks shall precede the expected date of confinement. Death grant: Rs. 1500 / for funeral. Injury benefit: Daily rate of wages for a max 180 days.

Provincial Employees Social Security

Applies: Notified ( Service of state , A. Forces , police, local bodies , excluded) Benefits : Sickness: A condition requires / necessitates medical treatment and absenteeism from work. Maternity : Twelve weeks, not more than six weeks shall precede the expected date of confinement. Death grant: Rs. 1500 / for funeral. Injury benefit: Daily rate of wages for a max 180 days.

Provincial Employees Social Security

Disablement pension: On expiration of injury benefit as per rates notified. Disablement gratuity: Minor disablement rates notified. Survivors Pension: Death as result of employment injury, payable to dependents.

Contribution
Max. Employers Contribution pm
Rs. 350

Type of Scheme

Max. Workers Contribution pm

--N/A--

Total Contribution pm
Rs. 350

Normal of Regular Scheme [section 20 (1), proviso] (7% of max. Rs. 5000 wages)

Self-Assessment (Optional) [section 20A (1)] (fixed rate irrespective of employees wages)

Rs. 210

Rs. 20 [section 20A(3)]

Rs. 230

E.O.B.I.
APPLIES: Industry / establishment employing ten or more persons. Old age pension: Male over sixty years / female over fifty five years. Contribution paid for not less than fifteen years. Old age grant: Not entitled for pension . Contribution less than 15 but more than 2 years. Survivor pension: Death , 36 months insurable employment. Invalidity pension: Not less than 5 years contribution paid.

CONTRIBUTION
Type of Scheme Max. Employers Max. Workers contribution contribution pm (sec. 9) pm (sec. 9-B)
Rs. 240 Rs. 40

Total contribution pm
Rs. 280

Normal Scheme

(6% of max. Rs. 4,000/- wages) Self-Assessment Scheme Rs. 240 Rs. 40 Rs. 280

(optional scheme, flat rate irrespective of employees wages, no inspection for two years)

Workmens Compensation Act 1923

Applies: Workman employed on monthly wages not exceeding six thousand rupees. Compensation: Personal injury by accident in the course of employment. Total or partial disablement.

Partial disablement: Temporary reducing earning capacity. Total disablement: Incapacitates wholly capable of doing at the time of accident.

Workmens Compensation Act 1923

Exceptions:

Rate of compensation:

Drunk / Drugs influence. Violation of rule securing safety Willful removal of safety guard / device. Rs. 200,000(Death and permanent total disablement) Payment deposit with the commission. Compensation not to be assigned by operation of law.

Notice and claim (S/10) Report of fatal accident (S/10-B) Penalties ( S/18 A)