Interim Report - Report No 278, June 1991

Case No 1534 (Pakistan) - Complaint date: 24-APR-90 - Closed

1. 451. The Pakistan National Federation of Trade Unions (PNFTU) presented a complaint of violations of trade union rights against the Government of Pakistan in a communication dated 24 April 1990. It supplied additional information in communications dated 25 April and 14 June 1990. The International Federation of Commercial, Clerical, Professional and Technical Employees (FIET) and the International Confederation of Free Trade Unions (ICFTU) expressed their support of this complaint in letters dated 23 May and 7 June 1990 respectively.
2. 452. At its meeting of February 1991, the Committee addressed an urgent appeal to the Government for its observations on this case (see 277th Report, para. 11). Specifically, the Committee noted that, despite the time which had elapsed since the presentation of the complaint and the seriousness of the allegations contained therein, the Government had not transmitted the observations or information requested. The Committee drew the attention of the Government to the fact that, in accordance with the procedural rules set out in paragraph 17 of its 127th Report, approved by the Governing Body, it would present a report on the substance of this case at its next meeting, even if the observations requested had not been received in due time, and urged the Government to transmit its observations as soon as possible.
3. 453. The Committee has not received the observations and information requested from the Government.
4. 454. Pakistan has ratified the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87) and the Right to Organise and Collective Bargaining Convention, 1949 (No. 98).

A. The complainants' allegations

1. 455. In its original complaint, the PNFTU referred to its communications addressed to the ILO supervisory bodies in the context of Pakistan's observance of Convention No. 87, namely letters of 21 December 1989 and 24 February 1990 which were reported in the Committee of Experts' 1990 report at page 196 of the English version.
2. 456. According to these communications, almost all multinational corporations which operate in Pakistan try to undermine union membership by offering "promotions" to union members and activists without actually giving them managerial responsibilities. This manoeuvre moves the workers concerned into the category of "employers" as defined in the Industrial Relations Ordinance of 1969 and obliges them to resign from union membership.
3. 457. The PNFTU alleges that the various managements offer salary raises with a view to tempting the workers into the "employer" category and then change their designation to "supervisor", "officer" or "superintendent" without, however, giving them the corresponding authority or power in the undertaking. In fact, these "promoted" workers continue to do the same work as they did before their change in status. Companies also put pressure on employees to accept promotions.
4. 458. The PNFTU cites the case of the Deutsche Bank (Asia) Employees' Union in Karachi whose General Secretary, Mr. M. Rafiq Khan, was promoted and whose President, Mr. Mohammad Izhar Alam, was being pressured to accept promotion. Such situations have also occurred at Grindlays Bank NZ, Bank of America and American Express, where the ratio of management staff to clerical staff has now increased to 50:50 or even 60:40. The PNFTU alleges that this tactic in the National Cash Register Ltd. and the Royal Insurance Company has resulted in there being no clerical staff left at all. The Gestetner Company's attempt to crush its union led to the promotion of a semi-literate ordinary mechanic, who was General Secretary of the union, to the management post of "engineer". The PNFTU states that the NCR Corporation in Karachi, after crushing the trade union, converted permanent employment contracts into periodic employment contracts in violation of the West Pakistan Industrial and Commercial Employment Ordinance of 1968; no employee dares to file a complaint under the Ordinance for fear of having his periodic contract cancelled. The PNFTU supplies copies of a NCR letter to an employee as evidence of this practice.
5. 459. The complainant attaches extracts from the Industrial Relations Ordinance of 1969 defining "employer" and "worker/workman". It asks that an ILO mission probe this behaviour of multinational companies.
6. 460. The complainant gives details of alleged anti-union tactics by the Singer Company. In Pakistan, this company has been functioning under various names but retaining common management, i.e. Singer (Pakistan) Ltd., Singer Industries (Pakistan) Ltd., Singer Sewing Machine Company. For a short two-year period (June 1985 to June 1987) Singer (Pakistan) Ltd. changed its name to Regnis (Pakistan) Ltd. and terminated the services of all employees and re-employed them with reduced benefits. In 1987 the name was changed to "Singer" but the employees of "Regnis" continued in employment. The demands of the Singer Employees' Union have been pending in the Labour Courts since January 1986. The company attempted to crush the Union but did not succeed. This company has only 12 employees whom the company considers able to be members of the union; the remaining 200 or so employees are treated as management. The PNFTU refers to the case of an employee who was designated as "Office Services Officer"; his services were terminated on 18 February 1988. However, the Labour Court ordered his reinstatement, with all back benefits, on 12 February 1990. The company intends to appeal this order.
7. 461. The PNFTU's letter of 25 April 1990 itemises anti-union practices at the Deutsche Bank and the ANZ Grindlays Bank, both in Karachi. From the copies of correspondence supplied by the complainant, it appears that the unions existing in the various banks were not consulted whenever conversions of workers from "employees" to "management" status occurred. It appears also that the Grindlays Bank management at times refused to reply to the unions' letters complaining of the artificial promotions, and when it did reply, it claimed that the union was estopped from raising this issue because of a settlement signed on 9 April 1989. The union concerned denied this estoppel. In its reply, the Deutsche Bank denies that it ever coerced promoted workers to leave their union.
8. 462. The PNFTU's letter of 14 June 1990 supplies a list of 69 employees of the Bank of America NT and SA, Karachi branch, who have been promoted to management level and of the 53 employees who continue as clerical staff and as members of the union. It adds that a similar imbalance exists in that Bank's Lahore branch, where 22 officers "administer" 18 workers. In reality, claims the PNFTU, only a few top officers really exercise management roles, the rest continue in the previous tasks, but are not permitted to unionise.

B. The Committee's conclusions

1. 463. At its February 1991 meeting, the Committee drew the Government's attention to the fact that, in accordance with its procedural rules, it would submit a report on the substance of this case at its next meeting, even if the Government's information or observations had not been received in due time. The Committee still has not received such observations.
2. 464. In these circumstances, and before examining the substance of the case, the Committee considers it necessary again to draw the Government's attention to the comments expressed in its First Report (para. 31, approved by the Governing Body in March 1952), which it has repeated on several occasions: the purpose of the whole procedure is to promote respect for trade union rights in law and in fact; as it protects governments against unreasonable accusations, governments on their side should recognise the importance of formulating detailed replies to the allegations brought against them so as to allow for objective examination.
3. 465. The Committee regrets the fact that the Government has not sent any reply to this complaint and that, owing to the time elapsed and the seriousness of the allegations, it finds itself obliged to examine the case without the benefit of the Government's observations.
4. 466. The complainant alleges in substance that almost all multinational corporations operating in Pakistan try to undermine union membership by moving workers in the category of "employers", through artificial promotions and salary raises, which are sometimes accompanied by coercion.
5. 467. The relevant sections in the 1969 Industrial Relations Ordinance provide:
6. (2) Definitions. In this Ordinance ...
7. (v) "Collective bargaining agent", in relation to an establishment or industry, means the trade union of workmen which, under section 22, is the agent of the workmen in the establishment or, as the case may be, industry, in the matter of collective bargaining.
8. (va) "Collective bargaining unit" means those workers or class of workers of an employer in one or more establishments falling within the same class of industry whose terms and conditions of employment are, or could appropriately be, the subject of collective bargaining together;
9. (viii) "Employer" in relation to an establishment means any person or body of persons, whether incorporated or not, who or which employs workmen in the establishment under a contract of employment and includes:
10. ...
11. (b) any person responsible for the management, supervision and control of the establishment;
12. ...
13. (e) in relation to any other establishment, the proprietor of such establishment and every director, manager, secretary, agent or officer of person concerned with the management of the affairs thereof.
14. (vi) "Trade union" means any combination of workmen or employers formed primarily for the purpose of regulating the relations between workmen and employers or workmen and workmen or employers and employers ...;
15. (viii) "Worker" and "workman" means any person not falling within the definition of employer ... but does not include any person -
16. (a)who is employed mainly in a managerial or administrative capacity; or
17. (b)who, being employed in a supervisory capacity ... performs, either because of the nature of duties attached to the office or by reason of the powers vested in him, functions mainly of managerial nature.
18. 3. Trade unions and freedom of association. Subject to the provisions contained in this Ordinance -
19. (a) workers, without distinction whatsoever, shall have the right to establish and, subject only to the rules of the organisation concerned, to join associations of their own choosing without previous authorisation;
20. (b)employers, without distinction whatsoever, shall have the right to establish and, subject only to the rules of the organisation concerned, to join associations of their own choosing without previous authorisation;
21. 468. The combined effect of the above sections is that, while employers as defined in subsection 2(viii) may establish and join their own associations, workers moved into the category of employers cannot bargain collectively their terms and conditions of work and are thus deprived of the usual rights associated with worker status.
22. 469. Notwithstanding that subsection 2(viii) of the Ordinance provides that employees are excluded from the definition of "workers" only if their functions are mainly of a managerial nature, the available information shows that, in practice, the law may be and has been applied so as to allow an extensive interpretation. Since the Government has not sent any observations, the Committee is not in a position to determine whether these are isolated instances of anti-union tactics by certain employers or constitute a common practice of "almost all multinational corporations", as alleged by the complainant both before this Committee and the Committee of Experts (Report III (Part 4A), International Labour Conference, 77th Session, 1990, p. 196, English version).
23. 470. However, the Committee can readily observe from the available information that the banks and companies mentioned in the complaint have adopted promotion policies which result in unusually high management/workers ratios, with the managers even outnumbering workers in some instances. This imbalance is particularly striking in the Singer company where 200 employees out of 212 are treated as management staff, and in the NCR and Royal Insurance companies, where there are no clerical staff left. The Committee further observes that while "promoted" employees were offered salary raises, they continued to do the same work as before and did not obtain any additional responsibilities or managerial authority. These "promotions" were clearly designed to undermine the membership of workers' trade unions, some of which were severely affected and others wiped out. The Committee can only conclude that the actions complained of violated the freedom of association principles.
24. 471. The Committee requests the Government to take the appropriate measures with a view to modifying the Industrial Relations Ordinance, 1969, so as to prevent employers from undermining workers' trade unions through artificial promotions. It draws the attention of the Committee of Experts on Application of Conventions and Recommendations to the legislative aspects of this case, particularly in view of the fact that the Committee initially raised this very issue in its 1990 Report.

The Committee's recommendations

1. 472. In the light of its interim foregoing conclusions, the Committee invites the Governing Body to approve the following recommendations:
   • (a)The Committee regrets the fact that since May 1990, the Government has failed to provide any of the information requested in this case. The Committee also regrets the Government's lack of co-operation and urges it in the future to submit detailed replies without delay.
   • (b)The Committee requests the Government to take the appropriate measures with a view to modifying the 1969 Industrial Relations Ordinance, so as to prevent employers from undermining workers' trade unions through artificial promotions of workers.
   • (c)The Committee requests the Government to keep it informed on the trade union situation in the companies involved.
   • (d)The Committee draws the legislative aspects of this case to the attention of the Committee of Experts on the Application of Conventions and Recommendations.