FIFTY years ago, Dawn reported that Gen Ayub “reiterated his Government’s determination to break up the concentration of wealth and ensure equitable distribution of national resources, which belonged collectively to the nation”.

History went on to show that Ayub failed to achieve his vision. However, in the late 1960s, the emergence of a popular movement led by Z.A. Bhutto was witnessed, which promised better living conditions for peasants and industrial workers.

Soon after taking power in December 1971, Bhutto nationalised key industrial units, banks and educational institutions apparently to fulfil his election manifesto of bringing about economic reforms. A hidden motive of the move was to strengthen his government’s grip over money-generating institutions and establish a robust power base.

Before the first PPP government, there were only three welfare schemes pertaining to the sharing of a company’s profits by workers, workmen’s compensation and medical treatment for workers employed in industrial and commercial undertakings. The latter scheme was inducted through the Provincial Employees Social Security Ordinance, 1965 and also extended to workers’ families.

Not much has been done to ensure workers’ welfare.

During the period 1972-1976, the government introduced a record number of welfare measures in existing laws and promulgated new ones for the workers’ benefit. Following considerable amendments in the Industrial and Commercial Employment (Standing Orders) Ordinance, 1968, benefits of compulsory group insurance, profit bonus and provident fund, besides gratuity which already existed, became mandatory.

Forums such as the management committee, joint management board and shop stewards were constituted through amendments in the Industrial Relations Ordinance, 1969. They enabled workers’ representatives to discuss with an organisation’s senior management all matters concerning their employment, welfare and improvement in working conditions. A National Industrial Relations Commission was formed to take up cases of unfair labour practices perpetrated either by the employers or the workers and to impose punishments upon the offenders. All this was positive. Today, the reality is different.

Last month, a meeting jointly organised by the Workers Employers Bilateral Council of Pakistan (Webcop) and Solidarity Interna­tional, was held in Karachi to review the functioning of institutions formed by the government to manage three key labour schemes. The institutions which came under discussion were the Sindh Emp­loyees Social Security Institution (SESSI), Em­­ployees Old-Age Benefits Institution (EOBI) and the Workers Welfare Fund (WWF).

Webcop highlighted the poor functioning of these institutions and the apathy of government officials towards the welfare of workers, corruption and favouritism.

Employers are required to pay monthly contributions on behalf of each eligible worker to the respective institutions. Besides, companies allocate 5pc of their annual profit before tax for distribution amongst the workers under the Companies Profits (Workers’ Participation) Act, 1968. In addition they have to pay 2pc of profit before tax on total income, to the WWF.

Since there is a ceiling imposed under the act for distribution of profit amongst workers, the remaining huge amount of profit from the 5pc allocation goes to the WWF. The funds so collected are required to be spent by the government on housing schemes for workers, their children’s education and as assistance towards daughters’ marriage etc.

According to Webcop, the total amount of contribution received by SESSI during 2014 was Rs2,484 million while expenses were Rs1,860m. The registered workers are dissatisfied with the management of the scheme. On the other hand, EOBI has been involved in scandals of embezzlement of funds. The meagre monthly pension of Rs3,600 drawn by the majority of pensioners throughout Pakistan since January 2012 was belatedly increased to Rs5,250 effective April 1, 2015.

In the tripartite governing bodies formed to run these institutions, the state — which should only play the role of a facilitator — has 70pc representation while the workers and employers combined together have only 30pc representation. Webcop recommended that since both the workers and employers represent interests of the beneficiaries, they should have a representation of 80pc in these bodies while the government should have only 20pc.

Also, all social-protection institutions should be merged into a single entity. Having a unified institution will reduce overhead costs, which can be used for granting enha­nced benefits to workers and their families.

Incidentally, the labour commission headed by Nasim Mirza, which was formed by the government of caretaker prime minister Moeenuddin Qureshi in 1993, had prepared a draft act combining the EOB Act, Social Security Ordinance and the Workers Welfare Fund Ordinance for one-window operation. Sadly, its recommendations were shelved by the succeeding PPP government.

The writer is an industrial relations professional.

Published in Dawn, May 13th, 2015

On a mobile phone? Get the Dawn Mobile App: Apple Store | Google Play