Labour laws and new economic agenda'

LABOUR LAWS AND NEW ECONOMIC AGENDA' LABOUR LAWS AND NEW ECONOMIC AGENDA' [concluding remarks of the Author at SAARC LAW Conference at New Dehli (India) on 29th January, 1994] By Mr. Justice Ajmal Mian, Judge, Supreme Court of Pakistan I am grateful to the organizers of the SAARC LAW Conference for having conferred honour on me by inviting me to co‑chair this Session. The papers which have been presented in this Session on the topic "Labour Laws and the New Economic Agenda" were quite informative and of high standard. By reading the above topic one gets the impression that the first part of the topic, namely "Labour Laws" has no nexus with the second part of it, i.e. "The New Economic Agenda". But minute analysis indicates that the above two parts of the topic have nexus with each other. The above topic has also nexus with the main objective of the SAARC given in its Charter namely, "to prompote the welfare of the people of South Asia and to improve their quality of life". I would like first to deal with the above two parts of the topic separately as to their origin and development and then as to how they have nexus with each other. The Labour Laws have their origin in the Sub‑Continent as far back as nineteenth century. First enactments consisted of enactments such as Assam Labour Acts, The Workmen Breach of Contract Act of 1859 and the Employers' and Workmen's (Disputes) Act, 1860, which rendered a workman liable to criminal penalties for breach of contract. Then we had Factories Acts of 1881 and 1891 which inter alia regulated employment and working hours of Women and Children. After that, Mines Act was passed in 1909. This was followed inter alia by the Workmen's Compensation Act, 1'923, which provided the framework for payment of compensation to workmen for personal injuries received during the discharge of their duties resulting into partial or permanent disabilities. Then we had Indian Trade Unions Act, 1926, relating to the formation of trade unions. 2. After the First World War in 1919, the International Labour Organization which is known as I.L.O. was established by the Peace Treaty of 1919 for promotion of industrial peace and social justice. It consists of representatives of Governments, employers and workers. The following basic principles of policy were adopted by the I.L.O:‑‑‑ "(1) Labour is not a commodity. (2) Freedom of expression and of association are essential to continue, progress. (3) Poverty anywhere constitutes a danger to prosperity every where. (4) War against want requires to be carried on with unending vigour within each nation and by continuous efforts in which the representatives of workers and employers, enjoying equal status with those of Governments, join with them in free discussions and democratic decisions with a view to the promotion of the common welfare." 3. In 1929 a Royal Commission on Labour was constituted in India, which in its report made a number of recommendations on all aspects of Labour problems including employment of women and children, working hours, conditions of work and industrial relations. On the basis of the above recommendations, as many as 24 Labour enactments were enacted by the Central and Provincial Legislature during the years 1932 to 1937. Just before partition of India, Industrial Employment (Standing Orders) Act, 1946, was enacted. The object of the above Act was to have uniform Standing Orders providing for the matters enumerated in the Schedule to the Act, namely classification of workmen, whether permanent, temporary, apprentices, probationers or Badlis, manner of intimating the workmen period and hours of work, holidays, pay days and wage rates, shift working, attendance and late coming etc. In India a number of amendments in the above Act have been made besides that a number of Provincial Legislatures have enacted Acts on the pattern of the above Act. Whereas in Pakistan, Industrial and Commercial Employment (Standing Orders) Ordinance, 1960, replaced the above Act which was repealed by the West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance, 1968. Another Act of pre‑partition days, which needs to be mentioned is the Industrial Disputes Act, 1947 (Act XIV of 1947), which was enacted in March, 1947. The object of the above Act was to make provisions for the investigation and settlement of industrial disputes and other allied matters. 4. It may be pertinent to point out that after the Independence of India, in view of enforcement of Constitutions in the Countries of Sub‑Continent, new legislation on Labour Laws got impetus. The Preamble to the Constitution of the Islamic Republic of Pakistan, 1973, hereinafter referred to as the Constitution, which has become part of the Constitution as Article 2‑A, inter alia guarantees Fundamental Rights including equality of status, of opportunity and before law, social, economic and political justice. I may also refer the Fundamental Rights contained in Article 11, 14 and 25 of the Constitution. Article 11 prohibits slavery, employment of a child below the age of 14 in any factory. Whereas Article 14 provides that "the dignity of man and, subject to law, the privacy of home, shall be inviolable". Article 25 inter alia guarantees that all citizens are equal before law and are entitled to equal protection. It may be stated that Article 37(e) of Chapter II of the Constitution relating to the Principles of Policy enjoins the State to make provisions for securing just and humane conditions of work, ensuring that children and women are not employed in vocations unsuited to their age or sex, and for maternity benefits for women in employment. Whereas Article 38 of the Constitution inter alia provides for the promotion of social and economic well‑being of the people inasmuch as it enjoins the State to eliminate concentration of wealth and means of production and to ensure equitable adjustment of rights between employers and employees, landlords and tenants, within the available resources of the country to provide for all citizens facilities for work and adequate livelihood with reasonable rest and leisure, social security by compulsory social insurance or other means, to provide basic necessities of life, to reduce disparity in the income and earning of individuals including persons in the various classes in the service of Pakistan. There are more or less similar provisions in most of the Constitutions of the remaining SAARC Countries. The Chapter relating to the directive Principles of State Policy of Indian Constitution inter alia contains Article 30, which provides that the State shall strive to promote the welfare of the people by securing and protecting as effectively as it may, social order in which justice, social, economic and political are ensured. 5. I may mention that after the enforcement of the Constitution, a number of legislations on labour welfare and settlement of disputes have been made. The Labour Laws have undergone through drastic changes with the passage of time. The old doctrine of laissez faire has become redundant. The nineteenth century concept of master and servant founded on the theories of "hire and fire" and "supply and demand" became matter of past history. The workmen under various enactments have been provided protection from their wrongful dismissal from service. The gratuity which was one time a gift from an employer to an employee on account of his good performance while he was in service no longer remained a gift but the workmen had been given legal right under the statutory provision to claim the same, namely, in Pakistan under clause (vi) of Standing Order 12 contained in the Schedule to the West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance, 1968, and in India by virtue of Payment of Gratuity Act, 1972. Similarly, the bonus is no longer considered solely as a reward by an employer to an employee on account of good production as by now certain types of bonus can be claimed by the workmen as a matter of right by virtue of statutory provisions, for example, in Pakistan because of clause 10‑C of the Standing Orders contained in the Schedule to the above Ordinance of 1968 and in India by virtue of Payment of Bonus Act, 1965. The employer is no longer free to fix the salary of his workmen at his sweet will but the statutory provision guarantees minimum wages, namely, in Pakistan under Minimum Wages Ordinance, 1961, and whereas in India, under Minimum Wages Act, 1948. The distinction between basic minimum Wages and fair wages is no longer significant as now minimum wages mean fair wages. The grant of leave to an employee is no longer solely a discretionary matter of an employer. The rights to claim casual and earned leave to the workers are also guaranteed by law. There has also been change in the approach in the matter of adjudication upon industrial disputes inasmuch as efforts are being made to do social justice and with that object to adjust rival claims of the employer and his workmen in a fair and just manner. While construing social legislations enacted for the benefit of the working class, liberal and beneficial constructions. are placed by the Courts in favour of the workmen. 6. I may mention a few social enactments enacted in Pakistan. (i) West Pakistan Maternity Benefits Ordinance, 1958, which provides law relating to employment of women in factories which inter alia includes the women's right to claim payment of maternity benefits during pregnancy and after delivery, protection from dismissal etc. (ii) Provincial Employees Social Security Ordinance, 1965. It caters for sickness benefits, maternity benefits, medical care during sickness and maternity, injury benefits, disablement pension, disablement gratuity, survival's pension, death grant in case of death, medical care in the case of employment injury etc. (iii) West Pakistan Industrial and Commercial Employments (Standing Orders) Ordinance, 1968, which besides providing for gratuity and bonus referred to hereinabove also provided for the terms and conditions of service to be given in writing, for publication of working time, holidays and pay days, wages rates, shift working for attendance and late coming, leave, payment of wages, group incentive scheme, compulsory group insurance, closure of business, termination of employment, procedure for retrenchment, procedure for re‑employment of retrenched workmen, special provision for construction workers etc. (iv) Companies Profit (Workers Participation) Act, 1968 (Act X11 of 1968) which envisages participation by the workmen in the profit of a company, having 50 or more workmen at any time during a year and having paid up capital on the last day of its accounting year Rs.20,00,000 or more, and value of the fixed assets of the company Rs.40,00,000 or more. It contemplates constitution of a fund of the above profit and distribution of income among the workers out of earnings from the investment of the fund. The fund is managed by the Board comprising representatives of employers and employees. (v) Workers' Children Education Ordinance, 1972. It provides for the levy of education cess on every employer of an establishment having 20 or more workers at any time during a year at Rs.100 per worker per annum. It envisages providing of free of cost education upto Matric to one child of every worker employed in an establishment covered by the above Act. (vi) Disabled Persons (Employment and Rehabilitation) Ordinance, 1981, which provides for employment, rehabilitation and welfare of disabled persons, making obligatory on commercial and industrial establishments as defined in the West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance, 1968, to employ disabled persons not less than 1 per cent of the total number of persons employed by it at any time. 7. These are some of the enactments, which have been enacted with the object to ensure socio‑economic justice to the working class. There are similar enactments in most of the SAARC Countries. However, by the above enactments, the desired results have not been achieved and the mandate of the Constitution has not been fulfilled as the above enactments related to the workmen working in industrial and commercial establishments having specified number of workmen at any time in a particular year. In other words, the above enactments are not applicable to the industrial and commercial establishments which employ less than the specified number of workmen, nor the same are applicable to the labourers working in rural areas in the agricultural field. In my view, after the introduction of mechanised farming, there seems to be no' justifiable reason not to declare agriculture as an industry and to apply the Labour Laws to the labour force engaged in the agricultural field. The nets of the above enactments be extended as to include maximum number of the working class. 8. The above beneficial legislations have direct bearing on the economic growth. Unless and until labour force is satisfied and contented, there cannot be any increase in the growth of the economy of a Country. The above drastic conceptual changes in the Labour Laws in broad context fall within the compass of the new economic agenda. However, strictly speaking the concept of new economic agenda connotes Regional Economic groupings, like the economic and political integration of the Western Europe reflected in the form of E.C. members countries, grouping of ASEAN Countries, of U.S.A. Canada and Mexico, unificatison of East and West Germany and emergence of GATT. In order to exploit resources of a country, maximally economic grouping of the countries has become imperative. No country can afford to live economically in isolation. The Western European countries are going big way towards complete economic unification. They intend to remove barriers in the movement of men power from one country to another. They also intend to have common currency etc. 9. The SAARC can help to deepen the understanding between our Governments. We should project and propagate that the participation of South Asian people in the regional economic cooperation will be beneficial for the people of all the countries. The SAARC is the World's one of the largest regional grouping in terms of population and potentials. It represents 1/5th of the World's population, has a vast reservoir of human talents, which fact is even recognized by the developed countries like U.S.A. and U.K. as the citizens of the SAARC countries have been successfully competing with the citizens of the above countries in their own countries in various walks of life. But unfortunately our economic output does not match with the above per centage. We share a common heritage, value and customs and our social structures bear resemblance. The South Asian region has vast potentials, vast scope of trade promotion, and large markets for products, and hence interlinkage in economic field among SAARC Countries can be highly rewarding. Uptil now on account of political irritants, the South Asian Countries have followed inward looking policies for a long period, which resulted in inefficient and non‑competitive industrial structures, protected by the above close door policy. A cursory glance on the statistics of import and export of the SAARC Countries indicate that the trade between them has been negligible in the past. It is, therefore, high time that we should learn lesson from the recent happenings in the World besides the above grouping of the countries as economic units, the Socialist economy which was a protected economy in Eastern Europe and U.S.S.R has collapsed. We should make sincere efforts to have economic collaboration. We should work out modality for achieving what the Western European Countries have achieved. If we succeed in achieving the above objective stage will come, when there will be no barriers in the movement of men power including the labour force within the SAARC Countries. In that context it is imperative that SAARC Countries should have uniform Labour Laws founded on progressive and dynamic approach. 10. In my bumble view, the SAARC Countries may take following steps:‑‑‑ (i) An Organization on the pattern of I.L.O. for SAARC Countries be established, if it has not yet been established. (ii) Efforts should be made to have uniform Labour Laws in the SAARC Countries with the minor additions/modifications according to the requirements, needs and local conditions of the Country concerned. (iii) That the Labour Laws should be simplified and codified. (iv) Frequent conferences of representatives of the Governments, employers and of employees of the SAARC Countries be held in order to discuss problems and difficulties and to work out solutions. (v) We should refix priority while framing our annual budgets ‑‑ gradually allocations for the items, which may generate economic growth be increased. In the 2nd World War Germany was more or less completely destroyed, whereas Japan was also badly economically hit. Since after the War, they were not allowed to raise any sizable Army under the surrender agreements, they concentrated on economic growth and as they were not spending substantial amount on defence, they have emerged as the most economically powerful countries. They have surpassed their conquerors. (vi) There cannot be any substantial economic collaboration unless there is mutual trust and confidence among the SAARC Countries, which cannot be achieved unless all political and other issues outstanding between the Countries are resolved. (vii) The Asian and Pacific Development Centre (APDC) in its work programme 1987‑90 with the participation of the five SAARC Countries, viz. Bangladesh, India, Nepal, Pakistan and Sri Lanka has done good grounding work. The above work can be made basis for promoting economic ties between the SAARC Countries. In the end I would again thank the organizers and the participants of the Conference. I wish all the success! MR JUSTICE QAZI HAMID‑UD‑DIN, JUDGE, PESHAWAR HIGH COURT, PESHAWAR Born in famous family of Qazian at Kohat on 12th September, 1934. Passed Matriculation Examination from Kohat. Got admission in Government College, Lahore. Passed B.A. Examination from Kohat and got 3rd position in the University. Graduated in law from Law College, Peshawar University. Topped F.E.L Examination and stood second in the final Law in the University. Practised law at Kohat for 6 years and then joined West Pakistan P. C. S. (Judicial Branch) in 1967. Worked as Civil Judge at D.I. Khan, Peshawar and Swabi till July, 1972. Remained Section Officer, Law Department, Peshawar from 8‑8‑1972 to 9‑7‑1974. Worked as Senior Civil Judge, Peshawar from 9‑7‑1974 to 5‑5‑1976. Remained Presiding Officer, Labour Court, Peshawar from 25‑7‑1977 to 29‑3‑1980. Worked as District and Sessions Judge at Mardan from 6‑4‑1980 to 19‑4‑1982. Worked as Registrar, Peshawar High Court, Peshawar from 24‑4‑1982 to 29‑1‑1983. Posted as Law Secretary, Government of N: W.F.P., Peshawar from 30‑1‑1983 to 11‑2‑1988. Remained as Judge Special Court for Speedy Trials from 14‑2‑1988 to 31‑5‑1989. From 1‑6‑1989 to 31‑7‑1989 remained O.S.D. Posted as Chairman N.‑W.F.P. Service Tribunal from 1‑8‑1989 to 12‑12‑1993. Elevated to the Bench as Judge of the Peshawar High Court, Peshawar on 13th December, 1993.