The Industrial Relations Advisers,

Management & Labour Laws Consultants


Room 3, 1st floor, Falaknuma Building, Near The Laboratory & Haroon Radio, Abdullah Haroon Road, Karachi

Phone: 2727266 & 2729770 Fax: 2729770 (S M Iqbal)  Email: 




Part - I

Principles, Aims and Objectives

Policy Foundations


Fundamental rights concerning labour as laid down in the Constitution of the Islamic Republic of Pakistan and international labour standards as enunciated in ILO Conventions ratified by Pakistan provide necessary framework for evolving a sound and stable mechanism for ensuring core labour rights. The labour laws and the system of labour administration in Pakistan will thus be brought in conformity with these standards to meet national objectives and international obligations.



The traditional environment of mutual antagonism and mistrust between employers and labour has adversely affected investment, business profitability and growth, all of which are crucial elements for ensuring security of employment, decent wages and social security for the labour sector.


The government keenly feels the need to foster an employer-employee relationship based on trust and partnership. For this purpose, the Labour Policy aims to enhance the required social dialogue between the labour and employers by facilitating and nurturing bilateral mechanisms for negotiations and mutual co-operation.


The creation of WEBCOP (Workers and Employers Bilateral Council of Pakistan) by the enlightened employers and labour leaders of Pakistan is a pioneering effort, and a positive development in this respect. The government fully supports this initiative and will promote steps, which aid such efforts. The regulatory authority of the government will be exercised only when bilateral mechanisms are demonstrably unable to resolve conflicts and issues.


Bilateral Codes of Conduct

The government as a facilitator shall persuade workers and employers' organisations to evolve bilateral codes of conduct at the level of enterprise and industry, which should lay emphasis on: (a) respect for reciprocal rights and obligations of both the parties; (b) communication between management and CBA and (c) enhanced confidence in union to play positive role in organisational performance.


Consolidation of Labour Laws

The existing voluminous labour legislation is overlapping in its coverage in several areas and anomalies in definitions and scope. The variety and complexity of labour laws has contributed adversely to industrial relations system. There is, therefore, the need for rationalisation/consolidation of the existing laws. It is proposed to simplify and consolidate these laws into following six basic laws:


1. Industrial Relations Ordinance

2. Conditions of Employment Ordinance

3. Wages Ordinance

4. Human Resource Development Ordinance

5. Occupational Safety and Health Ordinance

6. Labour Welfare and Social Protection Ordinance


Promotion of Healthy Trade Unionism

Healthy trade unionism based on freedom of association and an effective collective bargaining system is a prerequisite f or industrial peace, productivity and socio-economic uplift of labour. An environment for growth of healthy and responsible trade unionism will be created by encouraging responsible and representative trade unions.


Strengthening Social Dialogue Mechanism

The system of bilateral and tripartite social dialogue shall be strengthened and streamlined to promote industrial peace and harmonious labour-management relations.


Labour Judiciary

Labour Judicial System will be restructured, simplified, and minimised to provide speedy justice.


Social Safety Nets

Institutions responsible for social protection, social insurance and labour welfare need to be made fully autonomous and effective by restructuring their respective management boards to ensure adequate labour and employer representation and to strengthen their tripartite character. Policy-making, co-ordination, and monitoring of the functioning of these institutions will be entrusted to these tripartite boards exclusively.


Elimination of Gender Discrimination

There is a need to improve the role and contribution of women in the labour force and to provide them equal opportunities for employment. The work places will be made conducive for women workers. The principle of equal pay for work of equal value has been adopted with the ratification of ILO Convention 100, to promote gender equality in terms of the pay/wage system.


Workers' Children Education

The existing unjust two-tier system of education in the country has created a system of apartheid in society, wherein, the children of low-income groups are effectively deprived of access to good quality education thus preventing uplift of the deprived classes. Workers Welfare Funds and Education Cess Funds will be utilised to establish quality educational facilities in all district of the country for providing free education up to metric and intermediate levels to workers' children. Also, a system of merit scholarships for higher education will be put in place.


Elimination of Child Labour and Bonded Labour

Targets and activities set out in the National Policies Action Plans to Combat Child Labour (May 2000) and for Abolition of Bonded Labour (2001) need to be actively implemented. Additionally, Pakistan, by ratifying ILO Convention 182, has accepted the obligation to enhance age limit to 18 years in respect of worst forms of child labour, for entry into the labour market.


Challenge of Globalisation

Globalisation is a challenge for the developing countries. An inter-ministerial committee shall be formed to address issues such as social accountability, arising out of globalisation.


Labour Welfare Levies

Different channels are operating at present for collection of labour welfare levies and distribution of corresponding benefits to the employees. Measures will be taken to streamline collection of levies and distribution of benefits to save both workers and employers from inconvenience.


Section 2-A and 27-B

Section 2-A in the Service Tribunal Act, 1973, excludes the workers in public sector from the purview of labour laws/labour courts. Section 27-B in the Banking Companies Ordinance, 1962, prohibits a non-employee to hold the office in the executive of a trade union. These provisions have been resisted by the workers and their organisations. The government will address the legitimate concerns of all stakeholders.


Human Resource Development

In order to meet the challenges of a globalised economy, an educated and skilled labour force has a critical role to play. There is an urgent need to strengthen programmes of workers training in new and multiple trades for facilitating entry in the labour market; both nationally and internationally. The role of Skill Development Councils (already established) shall be strengthened in this context.


Occupational Safety and Health

Occupational safety and health of labour is required to be given the highest priority. A law covering all workplaces will be enacted and a National Tripartite Occupational Safety and Health Council will be established to meet the objective of providing adequate safety and ensuring compensation to workers.


Labour Research

Research in labour related disciplines and labour administration training is necessary for improvement of the system and up-gradation of the personnel. Measures shall be taken to promote research and training activities on most modern lines to meet the present day requirements. This will be achieved by re-organising the existing research and training institutes.


Labour Market Information System

The formulation and implementation of policies need to be based on comprehensive, reliable data and timely information on characteristics of the labour force and various features of the job market. Labour Market Information System (LMIS) will provide, on a continuous basis, information on employment/unemployment, job market requirements and future projections regarding evolution of the job market."



Action Plan

Industrial Relations


33. The law relating to industrial relations will be revised in the light of provisions of the Constitution of Islamic Republic of Pakistan and International Labour Standards to make it fully consistent wit the internationally recognised rights of labour. Some of the salient features of the new Industrial Relations Ordinance are as under:


(i) A tripartite board of conciliators shall be constituted to conciliate in industrial dispute where more than one establishment is involved or industry-wise trade union or a trade union at the national level is a party.


(ii) On failure of conciliation, proceedings in industrial dispute in a public utility service, the dispute shall be referred for arbitration to a board of arbitrators.


(iii) The phrase "notice of conciliation" shall be substituted to replace the "notice of strike or lockout".


(iv) The tenure of a CBA shall be extended from two to three years.


(v) Joint Management Board and Works Council shall be replaced by a single body, namely Joint Management Council.


(vi) Conviction on criminal offences of a heinous nature such as theft, physical assault, murder, attempt to murder, etc., shall be made the bass of disqualification of a person from being a member or office-bearer of a trade union.


(vii) The penalty of imprisonment shall be dispensed with under the law relating to industrial relations. The amount of fines shall, however, be enhanced suitably to make the law deterrent.


(viii) The terms of "employer" and "establishment" will be redefined.


34. In the context of industrial relations more emphasis will be laid on literalism. The government will take the following measures in this regard: - strengthen initiative/mechanism for bilateral co-operation such as WEBCOP, a trust relationship between employers and labour leading to greater efficiency, workers and employers will he encouraged to evolve bipartite codes of conduct at all level.


(iii) The role of the state to act as facilitator will be strengthened.


(iv) District Tripartite Labour Committees will be set up in pursuant with the ordinate with different agencies at district level to ensure implementation of different schemes of the government relating to labour welfare.


Union and Rationalisation of Labour laws

35. Currently there are large number laws and Rules & Regulations, which cover a variety of subjects.


a) Law relating to industrial relations.

b) Law relating to employment condition

c) Law relating to human resource development.

e) Law relating to labour welfare and social safety net.


Labour Judiciary

36. The status of Labour Court will be upgraded and given the jurisdiction to adjudicate in labour cases as court of first instance. The Labour Appellate Tribunals will be abolished and the appeal against the order of the Labour Court shall lie in the High Court.


37. To harmonies labour-employer relationship, a Labour Court, while determining the case relating to the termination of a workman, shall also have the power to award equitable compensation to the aggrieved workers in lieu of reinstatement into the service.


38. National Industrial Relations Commission shall be revamped and its functions and performance will be reviewed.


Conditions of Employment

39. The consolidated law relating to conditions of employment shall be made applicable to every industrial and commercial establishment employing 10 or more workers.


40. The law will, however, provide flexible working hours to the business community to meet the needs of the society.


41. Pakistan shall ratify ILO convention 182, which seeks to prohibit and eliminate the worst forms of child labour. A child, under the convention, has been defined as a person below the age of 18 years.



45. The federal government shall review every three years minimum wages of workers in consultation with the National Tripartite Minimum Wage Council in keeping economic conditions in the field concerning equal pay for men and women for work of equal value. A fair wage and respect of male and female workers will be introduced in the law to give effect to the Convention.


Occupational Safety and Health

47. The laws relating to occupational safety and health and working conditions shall be consolidated. Developments in industry and technology, a National Safety and Health Council shall be established to set OSH standards and meet the needs of the industry.


Transport Workers

49. The existing law to transport workers needs to be updated with a view to providing better transport development:


50. A human resource development programme shall be launched.


51. The law relating to apparel training, rehabilitation of disabled persons, etc., shall be consolidated and enacted as a law namely, the Human Resource Development Ordinance to meet the of new technology.


The role of Skill Development Council under the new law

52. The institutional arrangement to associate employer-workers in human resource development including planning and management through the Skill Development Councils in all the four provinces and the territory of Islamabad as employers-led autonomous organisations will be strength.


53. A comprehensive Social Insurance Scheme for old age and health benefits will be introduced on self-registration/voluntary basis to allow workers in the formal and informal sector of economy to benefit from it.


Model Schools for Workers & Children

54. Workers Model Schools (up to intermediate level) will be established in every district of the country to provide education for children of workers. These schools will be managed by independent tripartite provincial board of governors to protect them from political and bureaucratic interference.


Merit Scholarship/Stipend Scheme

55. A scholarship fund will be established to provide merit scholarships to workers' children seeking higher education. A stipend scheme for placement of workers' children in selected quality schools and colleges will also be initiated.


Welfare of Mine Workers

56. The Mines Act, 1923, and other laws relating to welfare of mine workers will be revised to provide more amenities to them. Steps will be taken to provide on-job training to these workers. EOBI, Social Security Schemes, and WWF Schemes would be extended to the mining sector to provide much needed social protection to mine workers.


Institutional improvement

57. The institutions namely Workers Welfare Fund, EOBI, and Social Security shall be re-organised and re-structured to ensure minimum administrative expenditure and maximum output and benefits for the employees. The management boards of these institutions would be re-structured to provide appropriate representation from labour and employers to strengthen their tripartite character.


Labour Welfare Measure by Employers

58. The employers of large establishments will be persuaded to evolve their own programmes for the welfare and social protection of their workers.


Inspection Services:


59. The labour inspection services in the provinces shall be reorganised and streamlined.


Labour Market Information System


60. A labour market information system for providing up to date labour force statistics and job market information shall be developed with the ILO and UNDP funding. Research and training facilities will be re-organised.-APP


Copyright (c) 2002 M/s. S.M. Yaqoob