The Industrial Relations Advisers,

Management & Labour Laws Consultants


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Circular No. C – 127                                                                                                                      Date: -18-04-2011





Consequences of the Sindh High Decision dated 26-02-2011 in the Const. pet No. D-260 / 2008, Employers Federation of Pakistan & others V/s Fed. Govt. on amending Labour Laws through the Finance Bill/Act



1.            The Federal Government adopted an easy course to amend labour laws not being parts of the Money Bill through the Finance Acts such as the Finance Acts of 2006, 2007 and 2008. The Senate has no say on the Finance Bill and in the National Assembly debates take place only on financial proposals of the Bill, and the amendments in the labour laws get automatically passed without discussion/debate on the same along-with the financial matters of the Finance Acts.


2.            In the above petition amendments made in five labour laws by the Finance Act, 2007 were challenged as the same did not constitute part of the Money Bill as provided by the Article 73 of the Constitution of Pakistan.


3.             It may also be noted that the Labour Laws being not part of the Money Bill any amdments in the same would go to both the houses of the Parliament but amending the same through the Finance Act deprives the Senate it’s Constitutional right as the Senate has no say on the Money Bill / Finance Act.


4.            In the above D.B. decision the Sindh High Court has elaborately discussed the Articles 73, other relevant Articles of the Constitution and various case laws cited by the parties and mainly based on the Supreme Court decision reported at PLD 2009 SC – 879, Sindh High Court Bar Association V/s Federation of Pakistan, it has held that the amendments brought about by Sections 2,6,7,10, and 12 of the Finance Act, 2007 as ultra-vires of the provisions of the Constitution, be treated as without law full authority and of no legal effect as the same do not constitute Money Bill under the Article 73 of the Constitution of Pakistan and have no link with the Federal Consolidated Fund and payment or charge upon money from it.


5.            We are concerned with the amendments made in the five labour laws through the Finance Act, 2007 i.e. (i) The Workmen’s Compensation Act, 1923, (ii) the Standing Orders Ordinance, 1968, (iii) The Minimum Wages for Unskilled Workers Ordinance, 1969 (iv) EOB Act, 1976 and (v) The Companies profits (Workers Participation) Act, 1968 which have been held to be ultra-vires of the Constitution, null and void and of no legal effect. The decision would have the same effect and result regarding the previous amendments made in the labour laws through the Finance Act of 2006 and the Finance Act 2008 also. The employers would be within their legal right to ignore these amendments and move fast to register their claim of due refunds from EOBI and from the Social Security Institution connected with 2008 amendment within 6 months as provided by Section 15 of the EOB Act, 1976 and Section 25 of the P.E. Social Security Ordinance, 1965 by making applications as early as possible before any other steps taken by the Governments stating that the detail figures of the refund are being worked out which shall be provided shortly before 6 months from 26-02-2011 in the same manner as both these Institutions frequently demand arrears of contributions from the   employers.


6.            No doubt the above decision would create confusion and problems which require the provincial Governments (as now labour is the provincial subject by the 18th Amendment of the Constitution) and the Federal Govt. to move fast and take proper legislative steps to correct the situation created by acting in violation of the Constitution of Pakistan. The courts are bound to give decisions only according to the law and the Constitution.


7.            Photo copy of the decision may be obtained from the Employers Federation of Pakistan for perusal and study.             



   For M/s S.M. Yaqoob

                                                                                                       Industrial Relations Advisers &  

                                                                                                       Labour Laws Consultants