Observation (CEACR) - adopted 1996, published 85th ILC session (1997)

Right to Organise and Collective Bargaining Convention, 1949 (No. 98) - Pakistan (Ratification: 1952)

The Committee notes the information provided by the Government in its report.

The Committee's previous comments referred to discrepancies between national legislation and the Convention on the following points:

- Limitations on free collective bargaining in the banking and financial sector (sections 38A to 38I of the Industrial Relations Ordinance (IRO), 1969) contrary to Article 4 of the Convention.

- Denial of the rights guaranteed by Articles 1, 2 and 4 for workers in export processing zones (section 25 of the Export Processing Zones Authority Ordinance 1980).

- Lack of sufficient legislative protection for workers dismissed for their trade union membership or activities.

1. The Government reiterates in its report that the procedure used by the Wage Commission for banks and financial institutions is intended to provide workers with the opportunity to bargain with the Commission without any hesitation instead of bargaining directly with the employer. In addition, the Government merely reiterates its previous statement to the effect that workers allowed to bargain freely with their employers form their own unions and put one impediment after another in the shape of nagging demands on a recurring basis. They also damage discipline and efficiency since they have too many office- bearers at an overwhelming majority of the operational units. According to the Government, this is aggravated by the fact that officers can also form associations under the law and that the branch managers and officers at grade-1 level are members and so have divided loyalties leaning more towards the interests of their associations. So, discipline amongst the staff and overall efficiency is deteriorating.

Moreover, the Government reiterates its view that, in institutions which rely on the deposits of the general public, to allow the right of collective bargaining would be tantamount to putting into jeopardy the trust given by individual depositors to banks and other financial institutions. The Government further indicates that the Wage Commission has recommended that staff unions of banks and financial institutions should not be allowed to negotiate wages and other fringe benefits and conditions of service as they are reviewed every three years by an independent Wage Commission set up by the Government. Accordingly, for these reasons, the Government indicates that it would not be advisable to change the status quo.

The Government states once again that the Wage Commission pronounces its awards after having considered all the relevant facts and circumstances of socio-economic importance and after giving patient hearings to the representatives of the concerned parties in order to achieve a consensus on all the issues raised by either party and the matters otherwise considered by the Commission. The Wage Commission issued its 7th Wage Award, to be effective from 1 January 1993, and has also given its views on staff union/management relations. This Award by the Wage Commission is not applicable, however, to banks and financial institutions in the private sector.

The Committee must once again recall that Article 4 provides that measures appropriate to national conditions shall be taken to encourage and promote the full development and utilization of machinery for voluntary negotiation between employers or employers' organizations and workers' organizations. It has indicated that, in the first instance, voluntary collective bargaining should be encouraged between the parties. Any external administrative structure established should be referred to only when both parties agree and its purpose should be that of facilitating the conclusion of a collective agreement. It should not serve to impose a ceiling.

With regard to the Government's statement that this procedure used by the Wage Commission is not applicable to banks and financial institutions in the private sector, the Committee must stress once again that Article 6 of the Convention only allows public servants engaged in the administration of the State to be excluded from its scope. The distinction must therefore be drawn between, on the one hand, public servants who by their functions are directly employed in the administration of the State (for example, civil servants employed in government ministries and other comparable bodies, as well as ancillary staff) who may be excluded from the scope of the Convention and, on the other hand, all other persons employed by the government, by public enterprises or by autonomous public institutions, who should benefit from the guarantees provided for in the Convention, and therefore be able to negotiate collectively their employment conditions, including wages. In this connection, the Committee emphasizes that the mere fact that public servants are white-collar employees is not in itself conclusive of their qualification as employees "engaged in the administration of the State"; if this were the case, Convention No. 98 would be deprived of much of its scope (see 1994 General Survey on freedom of association and collective bargaining, paras. 200, 261 and 262).

The Committee must therefore once again ask the Government to reconsider the question of collective bargaining in the banking and financial sector so as to ensure the agreement of both parties to any settlement of terms and conditions of employment. It expresses the firm hope that the Government will be able to indicate the progress made in this regard in its next report and would once again ask the Government to supply a copy of the award of the Wage Commission which is actually in force.

2. As regards the denial of freedom of association and the right to bargain collectively for workers in export processing zones (EPZs), the Government reiterates its previous statement that the benefits that accrue to these workers are better than those provided to other workers. Moreover, there is only one EPZ that has been established in Karachi at present which employs fewer than 6,000 workers, 80 per cent of whom are women. Since the cultural climate in Pakistan is not in favour of unionization of female workers due to social taboos, those workers do not demand that trade union rights under the IRO, be restored to them. There is, however, no ban on their forming any association. The Government adds that the earlier report of the tripartite Task Force recommending that labour laws apply throughout the entire country without discrimination is under active consideration by the Cabinet Committee. The Committee expresses the firm hope that the provisions of this Convention will be applied to EPZs and requests the Government to inform it of the Cabinet Committee's decision in this regard in its next report.

3. The Committee notes with regret that the Government has not provided its observations to the Committee's previous comments on a Supreme Court decision dated 11 August 1994 which severely restricts the right to judicial recourse of dismissed workers under section 25A of the IRO. In this judgement, the Supreme Court determined that "a person who has been dismissed, discharged, retrenched, laid off or otherwise removed from employment is not a worker (as defined by the IRO) unless his dismissal, discharge, etc., had connection with or was in consequence of an industrial dispute or whose dismissal, discharge, etc., had led to such a dispute". The Supreme Court went on to hold that such persons were therefore not entitled to the remedy provided for under section 25A of the IRO.

The Committee would once again remind the Government that, in freely ratifying this Convention, it had undertaken, in accordance with Article 1(2)(b) to ensure the protection of workers against acts of anti-union discrimination calculated to cause the dismissal of or otherwise prejudice a worker by reason of union membership or because of participation in union activities. The above court decision would appear to have the effect of blocking any legal recourse to workers dismissed for their trade union membership or activities if there is no industrial dispute pending or raised over such dismissals. The Committee requests the Government to take the necessary measures to ensure that the appropriate provisions of the IRO are amended so that dismissed workers have the possibility of recourse to legal proceedings to protect themselves against anti-union dismissals whether or not an industrial dispute is raised or pending over such dismissals. It further requests the Government to inform it in its next report of any progress made in this regard.

More generally, the Committee regrets to note that despite the undertaking of a direct contacts mission between a representative of the Director-General and the Government in January 1994, as well as the establishment of a tripartite Task Force on Labour which drew up recommendations very similar to those of the mission on amendments to be made to the legislation, the Government has still not taken the appropriate steps to give effect to the above-mentioned recommendations. The Committee therefore urges the Government to ensure that substantial progress is made in amending national legislation and practice concerning the issues raised by the Committee in the very near future.