Malice Towards None & All: Billions Belonging To Workers Remain Unpaid

Advocates of workers' rights have persistently argued the view that social security net should not be distributed among the provinces, rather it should be managed through the federation.

Malice Towards None & All: Billions Belonging To Workers Remain Unpaid

It is a great tragedy that for the last 17 years, the working class of Pakistan has been deprived of its lawful right to billions of rupees for the sheer apathy of all the three branches of the State. What makes the situation more painful is the fact that this sordid saga remains largely unnoticed by the public at large and the media media. 

It all started when the sections 2 and 4 of the Workers Welfare Ordinance, 1971 were amended by the Finance Act of 2006 and subsequently by the Finance Act of 2008 to broaden the scope of the obligation on industrial establishments to contribute towards the Workers’ Welfare Fund, established under Section 3 of the Ordinance of 1971. These amendments were declared ultra vires of the Constitution of Islamic Republic of Pakistan by the Lahore High Court in East Pakistan Chrome Tannery (Pvt.) Ltd v Federation of Pakistan and others (2012) 105 TAX 81 (H.C. Lah.).

The order by the Lahore High Court was endorsed in 2016 by the Supreme Court in (2016) 114 TAX 385 (S.C. Pak.)]. The issue was whether WWF is a fee or tax. The Supreme Court said it was ‘fee’ and not ‘tax’ and, therefore, the amendments made by the Finance Acts of 2006 and Finance Act of 2008 as Money Bill were unlawful.

Earlier, the Finance Act of 2007 amended various provisions of the Workmen Compensation Act, 1923, the West Pakistan Industrial and Commercial Employees (Standing Orders) Ordinance, 1968, the Companies’ Profit Workers’ Participation Act, 1968, the Minimum Wages for Unskilled Workers Ordinance, 1969 and Employees Old Age Benefits Act, 1976 to broaden the scope of the obligation of the employers in the respective statutes.

The above amendments were challenged before the High Court of Sindh which, through its judgment dated February 26, 2011, held that the amendments through the Finance Act of 2007 not falling within the purview of Article 73(2) of the Constitution could not have been lawfully inserted through Money Bill.

Through the Finance Act 2008, various provisions of the Employees Old Age Benefits Act, 1976 pertaining to contributions to be made thereunder, were also amended widening the scope of obligation on employers to contribute towards the Employees’ Old-Age Benefits Fund established under Section 17 of the Act of 1976. These amendments were challenged through constitution petitions before the Sindh High Court which, vide its judgment dated 3.10.2012 reported as Soneri Bank Limited through Jaffar Ali Khan and others v Federation of Pakistan through Secretary Law and Justice Division, Pak Secretariat, Islamabad and others (2013 PLC 134), held that the levy was a fee and not a tax, therefore, the amendments made by the Finance Act of 2008 could not have been lawfully brought about through a Money Bill. This view of Sindh High Court was also upheld by the Supreme Court.

The Supreme Court in its authoritative judgement (2016) 114 TAX 385 (S.C. Pak.)] concluded: “There may very well be certain levies/contributions that do not fall within the purview of Article 73(3) but still do not qualify the test of Article 73(2) and therefore cannot be introduced by way of a Money Bill, and instead have to follow the regular legislative procedure… A review Petition against this judgement is still pending in Supreme Court.  

In a meeting chaired by the then Federal Minister for Inter Provincial Coordination Division, Dr. Fehmida Mirza, on October 10, 2018, it was reportedly conveyed that the trans-provincial fund, assets, institutions and the programmes run by Employees Old Age Benefits Institute (EOBI) and Workers Welfare Fund (WWF) were difficult to be divided among the provinces and that the migration of the workers would be a big challenge, if the subject was considered to have been devolved. 

The above shows the sheer incompetence of our governments and parliamentarians that they could not distinguish which laws are to be presented as Money Bill and which one should go to both the Houses. The beneficial amendments made wrongly in labour laws for the working classes over a decade were corrected by Pakistan People Party (PPP) and Pakistan Muslim League (Nawaz)—PMLN—during the Decade of Democracy from 2008-2018.

It can be termed as the worst expression of callousness towards the labourers. Both the PPP and PML-N claim to be champions of the cause of the downtrodden, but in reality this is merely for lip service. Together, they got ten years to rectify the mistake pointed out by the courts but they remained unmoved. This also confirms that when the matter comes to welfare of the workers, our legislators are totally insensitive but when issue is of raising their own salaries, laws are passed within a few minutes in the Senate and National Assembly. They did not bother that their lapse has affected over half a million pensioners under EOBI and some five million workers of various categories including women, registered for contributions.

The same callousness was shown by Pakistan Tehreek-e-Insaf (PTI) during its rule that ended abruptly on April 9, 2022 and by the Pakistan Democratic Movement (PDM) during its rules of 16 months, in which a number of laws were passed for serving and protecting the legislators.

In a meeting chaired by the then Federal Minister for Inter Provincial Coordination Division, Dr. Fehmida Mirza, on October 10, 2018, it was reportedly conveyed that the trans-provincial fund, assets, institutions and the programmes run by Employees Old Age Benefits Institute (EOBI) and Workers Welfare Fund (WWF) were difficult to be divided among the provinces and that the migration of the workers would be a big challenge, if the subject was considered to have been devolved. There was apprehension that any ill-advised action would affect the welfare of the workers. The meeting was aimed at resolving the post 18th Constitutional Amendment related issues of EOBI and WWF. The Minister was reported to have claimed that the Government believed in cooperative federalism and committed to devise a mechanism based on consensus, to ensure the welfare of workers.

Obviously the Minister was not even aware of the fact that since 2006, amendments made in various labour laws to broaden their scope were struck down by the Supreme Court in its order of November 10, 2016 reported as Workers Welfare Funds m/o Human Resources Development, Islamabad through Secretary and others v East Pakistan Chrome Tannery (Pvt.) Ltd through its GM (Finance), Lahore etc. and others [(2016) 114 TAX 385 (S.C. Pak.)]. It is a matter of record that till today no remedial measures have been taken to retrieve losses of billions caused to the Funds established under these laws for the welfare of millions of workers.

In the wake of the Eighteenth Amendment, the subject of labour is devolved to the provinces. The provinces have since then passed their own laws related to workers’ welfare which are challenged by trans-provincial entities on the basis of judgement of Supreme Court in Southern Gas Company Ltd, and others versus Federation of Pakistan and others (2018 SCMR 802) which says: “At this juncture it is to be noted that when a provincial legislature is not competent to legislate with regard to the workmen of trans-provincial establishments, obviously the Federation has to interfere in the matter with a Federal Legislation to preserve and protect the fundamental rights of the said workmen ensured under Article 17 of the Constitution....” The Sindh High Court has granted stay in cases challenging the vires of laws covering trans-provincial entities subject to payment to the nazar (treasurer) of full amount. At present billions are lying with the court which are not being utilised for the benefit of the workers.

The Sindh High Court (SHC) in Shafiquddin Moinee v Federation of Pakistan through Secretary, Ministry of Human Resources Development, Islamabad & 2 Others 2018 CLD 1088 held that the Sindh Companies Profits (Workers’ Participation) Act, 2015 would apply to all trans-provincial companies employing a total of 100 or more workers at any time of the year, and operating across the country irrespective of the regional location of their registrations. The Supreme Court after granting leave to appeal against this order suspended its operation on 10.7.2018 on the basis of its judgement in Southern Gas Company Ltd, and others versus Federation of Pakistan and others (2018 SCMR 802). It also pointed out that issue noted above is already sub judice in another Civil Petition No.1604 of 2018 titled as OGDCL versus Federation of Pakistan.

It is time that all the parties in their elections manifestos for February 8, 2024 commit to ensure retrieval of lost contributions retrospectively from 2006.

It is high time that the federal government should approach the Supreme Court for a declaratory judgement under Article 184 of the Constitution, especially when the matter is already seized by it in Human Right Case 33954-P of 2018. The Supreme Court has original and exclusive jurisdiction, ousting all courts. Article 184(1) & (2) that reads as under:

184. Original jurisdiction of Supreme Court.

(1) The Supreme Court shall, to the exclusion of every other Court, have original jurisdiction in any dispute between any two or more Governments.

Explanation. In this clause, “Governments” means the Federal Government and the Provincial Governments.

(2) In the exercise of the jurisdiction conferred on it by clause (1), the Supreme Court shall pronounce declaratory judgments

It is time that all the parties in their elections manifestos for February 8, 2024 commit to ensure retrieval of lost contributions retrospectively from 2006. No one in the Senate will oppose any Bill for recovery of money for labour welfare. The curative amendment will bring billions in the national kitty for providing pension, decent housing, free education and health facilities etc. for the beneficiaries of welfare laws. The federal and provincial governments are looking for money, not knowing that billions are lying unpaid and unutilized with industrial undertakings, employers and courts.

The representatives of workers have been consistently emphasising the view that social security net should not be distributed among the provinces, rather it should be managed through the federation and implemented by the federating units. The trans-provincial fund, assets, institutions and the programs run by EOBI and Workers Welfare Fund (WWF) are difficult to be divided among the provinces. Besides, migration of workers would be a big challenge. They rightly pointed out that subject can be devolved but welfare of the workers and citizens cannot. Thus, subject of labour though devolved through 18th Amendment, the workers and citizens are not—they remain the responsibility of Federation as elaborated in Pakistan Workers Federation, Balochistan v Government of Pakistan (2014 PLC 351).

The writer, Advocate Supreme Court, is Adjunct Faculty at Lahore University of Management Sciences (LUMS), member Advisory Board and Visiting Senior Fellow of Pakistan Institute of Development Economics (PIDE)