Interim Report - Report No 326, November 2001

Case No 2096 (Pakistan) - Complaint date: 06-AUG-00 - Follow-up

Allegations: Restrictions on trade union and collective bargaining rights for employees of the banking sector

1. 419. In communications dated 6 and 30 August, 4 September and 2 October 2000, the United Bank Employees’ Federation presented a complaint of violations of freedom of association against the Government of Pakistan.
2. 420. The Government supplied its observations in communications dated 3 May and 20 August 2001.
3. 421. 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 complainant’s allegations

1. 422. In its communications of 6 and 30 August 2000, the United Bank Employees’ Federation asserts that the Government has violated Conventions Nos. 87 and 98 by introducing an amendment (section 27-B) to the Banking Companies Ordinance, 1961, on 2 June 1997 which infringes the trade union and collective bargaining rights of all employees in the banking sector, including members of its Federation. Section 27-B was introduced in the Banking Companies Ordinance, 1962, by the legislature through enactment of the Banking Companies Ordinance (Amendment) Act, 1997 (Act No. XIV of 1997). Section 27-B reads as follows:
2. 27-B. Disruptive union activities:
3. (1) No officer or member of a trade union in a banking company shall use any bank facilities including a car or telephone to promote trade union activities, or carry weapons into bank premises unless so authorized by the management, or carry on trade union activities during office hours, or subject bank officials to physical harassment or abuse, nor shall he be a person who is not an employee of the banking company in question.
4. (2) Any person violating any of the provisions of subsection (1) shall be guilty of an offence punishable with imprisonment of either description which may extend to three years, or with fine, or with both.
5. 423. In a communication dated 4 September 2000, the United Bank Employees’ Federation asserts that, pursuant to the enactment of section 27-B of the Banking Companies Ordinance, 1962, employees of the banking sector in general and its members in particular, have been ruthlessly victimized by the management of the banks concerned. Further restrictions had been imposed on trade union activities in all banks, particularly in the United Bank Limited (UBL). Furthermore, over 500 trade union leaders in the banking sector had been dismissed or terminated from their employment including Mr. Maqsood Ahmad Farooqui, President of the UBL Employees’ Federation of Pakistan and Mr. Rahmat Ullah Kazmi, General-Secretary, UBL Labour Union Karachi. These dismissals and terminations are being used by the UBL management as a pretext to undermine the very existence of the United Bank Employees’ Federation. In effect, the management of the UBL submitted two applications, in 1999 and 2000 respectively, to the Registrar of the National Industrial Relations Commission to cancel the registration of the United Bank Employees’ Federation on the grounds that many of the latter’s office-bearers ceased to be in the UBL’s employment in violation of section 27-B of the Banking Companies (Amendment) Act, 1997 (copies of the application for cancellation of registration are attached to the complaint). However, these applications were rejected by the Registrar on the grounds that section 27-B of the Banking Companies (Amendment) Act, 1997, was not applicable to the formation or cancellation of trade unions and, as such, the Registrar of Trade Unions who was appointed under section 12 of the Industrial Relations Ordinance (IRO), 1969, was not required to act other than for violations of the provisions of the IRO, 1969.
6. 424. In a communication dated 2 October 2000, the United Bank Employees’ Federation contends that the management of the UBL is continuing to victimize activists and officers of the Federation by way of transfers, dismissals and compulsory termination (copies of termination and dismissal letters are attached to the complaint). By resorting to the aforesaid tactics, the number of office-bearers of the United Bank Employees’ Federation have been considerably reduced and the UBL management refuses to enter into negotiations with it. Moreover, the management of other nationalized commercial banks are adopting the same negative tactics. In short, the United Bank Employees’ Federation concludes that if the ILO does not take effective and timely action, then all unions and/or collective bargaining agents will cease to exist in the banking sector shortly.

B. The Government’s reply

1. 425. In its communication dated 3 May 2001, the Government states that section 27-B of the Banking Companies Ordinance does not curtail trade union activities within the meaning of Conventions Nos. 87 and 98 and the Industrial Relations Ordinance, 1969. Moreover, the introduction of section 27-B has been upheld as a valid piece of legislation by the superior courts in Pakistan. According to the Government, it was inserted in the Banking Companies Ordinance, 1962, due to the increasingly disruptive labour situation in the banking industry as well as the deteriorating economic conditions in the country. However, the Government will review this as soon as economic conditions improve. In its communication dated 20 August 2001, the Government indicates that section 27-B does not impair the right to undertake negotiations with the management. Moreover, the restrictions imposed by this provision are in the overall interest of the banking industry. This provision provides safeguards against those who in the name of trade union leadership try to damage the industry. Hence, this provision was enacted for the larger interests of workers in the banking sector.

C. The Committee’s conclusions

1. 426. The Committee notes that the allegations in this case concern restrictions on the trade union and collective bargaining rights of employees in the banking sector pursuant to the enactment of section 27-B of the Banking Companies (Amendment) Act, 1997 (Act No. XIV of 1997). The Committee observes that, according to the Government, section 27-B does not curtail activities within the meaning of Conventions Nos. 87 and 98.
2. 427. Under the terms of section 27-B, the Committee notes that only employees of the bank in question may become a member or officer of a trade union in the bank, under penalty of up to three years’ imprisonment. In this regard, the Committee would emphasize that, if the national legislation provides that all trade union leaders must belong to the occupation in which the organization functions, there is a danger that the guarantees provided for in Convention No. 87 may be jeopardized. In fact, in such cases, the laying off of a worker who is a trade union official can, as well as making the person forfeit their position as a trade union official, affect the freedom of action of the organization and its right to freely elect its representatives, and even encourage acts of interference by employers. For the purpose of bringing legislation which restricts union office to persons actually employed in the occupation concerned into conformity with the principle of free election of representatives, it is necessary at least to make these provisions more flexible by admitting as candidates persons who have previously been employed in the occupation concerned and by exempting from the occupational requirement a reasonable proportion of the officers of an organization [see Digest of decisions and principles of the Freedom of Association Committee, 4th edition, 1996, paras. 369 and 371].
3. 428. The Committee observes the Government’s statement that section 27-B was enacted due to the increasingly disruptive labour situation in the banking industry as well as the deteriorating economic conditions in the country. The Committee recalls, however, that the Committee of Experts on the Application of Conventions and Recommendations has emphasized that the freedom of association Conventions do not contain any provision permitting derogation from the obligations arising under the Convention, or any suspension of their application, based on a plea that an emergency exists [see Digest, op. cit., para. 186]. Noting that section 27-B was enacted over four years ago (on 2 June 1997), the Committee would urge the Government to take the necessary steps without delay to amend section 27-B so as to admit as candidates persons who have previously been employed in the occupation concerned, and by exempting from the occupational requirement a reasonable proportion of the officers of an organization. It requests the Government to provide information on any progress made in this regard.
4. 429. Moreover, the Committee notes the complainant’s allegations that this provision is being used by the management of the United Bank Limited (UBL) and of other banks to lay off trade union leaders and activists in a bid to undermine the position of the complainant as well as that of other unions in the banking sector. In particular, the complainant alleges that over 500 trade union leaders in the banking sector have been dismissed or terminated from employment, including Mr. Maqsood Ahmad Farooqui, President of the UBL Employees’ Federation of Pakistan and Mr. Rahmat Ullah Kazmi, General-Secretary, UBL Labour Union Karachi. In this regard, the Committee takes note of the copies of termination and dismissal letters provided by the complainant, which were also sent to the Government. The Committee also notes with serious concern that the management of UBL submitted applications for the cancellation of registration of the complainant (without any success) in 1999 and 2000 on the grounds that many of the complainant’s office-bearers had ceased to be in the UBL’s employment in violation of section 27-B. Noting with regret that the Government has not provided any observations in respect of these serious allegations, the Committee would urge the Government to reply without delay to the complainant’s allegations that over 500 union leaders in the banking sector, including Mr. Maqsood Ahmad Farooqui, President of the UBL Employees’ Federation of Pakistan and Mr. Rahmat Ullah Kazmi, General-Secretary, UBL Labour Union Karachi, were dismissed or terminated from employment pursuant to the enactment of section 27-B of the Banking Companies (Amendment) Act, 1997 (Act No. XIV of 1997). It further requests the Government to inform it of the current status of these trade union leaders.
5. 430. The Committee draws the attention of the Committee of Experts on the Application of Conventions and Recommendations to the legislative aspects of this case.

The Committee's recommendations

1. 431. In the light of its foregoing interim conclusions, the Committee invites the Governing Body to approve the following recommendations:
   • (a) The Committee urges the Government to take the necessary steps without delay to amend section 27-B of the Banking Companies (Amendment) Act, 1997, so as to admit as candidates for union office persons who have previously been employed in the occupation concerned, and by exempting from the occupational requirement a reasonable proportion of the officers of an organization. It requests the Government to provide information on any progress made in this regard.
   • (b) The Committee urges the Government to reply without delay to the complainant’s allegations that over 500 union leaders in the banking sector, including Mr. Maqsood Ahmad Farooqui, President of the UBL Employees’ Federation of Pakistan and Mr. Rahmat Ullah Kazmi, General-Secretary, UBL Labour Union Karachi, were dismissed or terminated from employment pursuant to the enactment of section 27-B of the Banking Companies (Amendment) Act, 1997. It further requests the Government to inform it of the current status of these trade union leaders.
   • (c) The Committee draws the attention of the Committee of Experts on the Application of Conventions and Recommendations to the legislative aspects of this case.