INDUSTRIAL DISPUTES RESOLUTION

An overview of the role played by legal intervention and enforcement in Pakistan

By:
MAHMOOD AHMAD CHAUDHARY,
Advocate, Supreme Court, Jhelum

Pakistan won independence on the 14th of August, 1947 and like all other institutions and movements which took place during the British Raj, it inherited the trade union movement also. Before the partition of the United India, there were two important and influential central trade union bodies namely: All India Trade Union Congress and the Indian Federation of Labour. There was quite a strong trade union movement in united India on the one hand and on the other hand the entrepreneur was playing its traditional role of negating the very idea of trade unionism. The feudalistic landlord tenant relation was perceived to be a model with regard to those relations rather the democratic one. This ill-conceived idea regarding labour relations resulted in making the earliest law for the resolution of industrial disputes named as" Employer and Workman (Disputes Act), 1860” which remained in force till 1929; It provided for the determination of disputes relating to wages of workers. These matters used to be handled by magistrates. The Trade Disputes Act, 1929 was enacted to meet situations arising out of industrial discontentment. The Act provided for the ad-hoc machinery of rather rudimentary character by enabling the government to establish Court of enquiries and conciliation boards. This Act was amended in 1936 empowering the government to appoint conciliation officers responsible for mediating in or promoting the settlement of trade disputes. The Trade Disputes Act, 1929 was amended from time to time and was eventually replaced by the Industrial Disputes Act, 1947. The Act provided for a hierarchy of machinery to promote healthy relations between employer and workman through works committee, conciliation, board of conciliation, Court of enquiry etc. Failing which, settlement was arrived at by reference to the ad-hoc tribunal. This Act is a mile stone in the context of the development of industrial relations laws as it was inherited by Pakistan and with amendments from time to time, it remained in force till 1959 when it was replaced and reenacted under the title of the Industrial Disputes Ordinance, 1959. The Ordinance provided for the Constitution of Industrial Courts responsible for:--

(i) adjudicating and determining an industrial dispute in respect of which an application was made.

(ii) enquiring into and adjudicating any matter referred to it by the government, and

(iii) trying certain offences under the Ordinance.

The conciliation officers were required to make efforts to promote settlement of disputes between the parties within a specific time and in case of failure, to issue failure certificate. The parties were given direct access to the industrial Court on the basis of failure certificate. The awards of the industrial Courts were final and binding on the parties.

The Industrial Disputes Ordinance, 1959 along with the Trade Union Act, 1926 as amended in 1961 and the Industrial and Commercial Employment Ordinance, 1962 regulated almost all aspects of the employment relations. Following the 1962 Constitution, when the subject of labour was provincialised, the government of East and West Pakistan both tried to regulate the industrial relations through the following laws:-

(i) The East Pakistan Labour Disputes Act, 1965

(ii) The East Pakistan Trade Union Act, 1965

(iii) The East Pakistan Employment of Labour Act, 1965

(iv) The West Pakistan Industrial Dispute Ordinance, 1968

(iv) The West Pakistan Trade Union Ordinance, 1968 and

(v) The West Pakistan Industrial and Commercial Employment Standing Orders Ordinance, 1968.

Through these laws the already existing procedure of registration was made a bit more complicated and some control was also made legally possible by government. A partial right of strike and lock out was allowed so for as the non-public utility service industries were concerned. Strike or lock out in public utility industries was rendered impossible because of prior notice and a ban to go on strike during the proceedings before conciliation officers and industrial Courts.

These laws because of their ineffectiveness could not serve the purpose for a longer period and discontentment in working classes kept rising. There was a time when industrial unrest brought the country's economy almost to a grinding halt. The existing circumstances in the industrial concerns and the inequity in the external economic situation made the industrial worker intolerant, hostile and unwilling to work. Accordingly, the laws were, leaving aside the West Pakistan Industrial and Commercial Employment Standing Orders Ordinance, 1968 replaced in 1969. The laws relating to trade unions and industrial disputes were consolidated into one under the title of the Industrial Relations Ordinance, 1969, which further liberalized the procedure of registration and reduced the powers of Registrar; the collective bargaining agent was accepted as a corner stone of the industrial relations. A partial right of strike was also restored.

In pursuit of elusive industrial peace, the IRO, 1969 was amended from time to time. The right to associate had not only been accepted as fundamental but was also written down explicitly and clearly following the ILO convention 87 in letter and spirit. The workers could form trade unions of their own choice without fear or interference from any quarter. They could not be victimized, dismissed, transferred or otherwise punished without the permission of the Registrar of Trade Unions. A High Power National Industrial Relation Commission was set up to promote the formation of trade unions and federations at the inter-provincial level and to register industry-wise trade unions and for the determination of collective bargaining at the national level. The principle of recognition of the union by the employer had been systematized into collective bargaining agency. A union having the membership of 33% and having been so certified and winning in the referendum by a simple majority could be declared as CBA which had the privilege of check off, nomination of shop steward and the right of representation at every level. They had the power to nominate a panel of auditors to check the accounts of the company. The IRO also enacted that the charter of demands forming the basis of industrial disputes was to be necessarily negotiated before a notice of strike/lock out was sent. During the period of strike notice, the dispute was to be mediated by the Conciliator. In case of failure, the Conciliator would persuade the parties for voluntary arbitration. After failure in conciliation and the parties having declined arbitration, workers could go on strike. The government was empowered to prohibit the strike/lock out if it lasted for more than thirty days and at the same time could refer the dispute to Labour Court. During the pendency of the dispute and thereafter till the award was operative, strike was prohibited.

Besides the collective bargaining, the Ordinance of 1969 enjoined "Works Council" to be established to promote measures for securing and preserving good relations between employer and his workmen. It was in the tradition of joint consultation meant for preventing dispute from arising. Subsequently, the Council was also made a means of settling and of avoiding any unnecessary and time-wasting arguments or dislocations. It consisted of management and trade union representatives in equal number

The 1969 Ordinance was repealed in the year 2002 and replaced by the Industrial Relations Ordinance, 2002 based on the report of the Commission on Labour Law established in 1999.The Commission recommended consolidation of existing labour laws into six broad categories. The 24th Pakistan Tripartite Labour Conference held on July 30.31.2001 also made useful recommendations for the legislative reforms. The new Ordinance was made it appears, in the light of these recommendations with emphasis on bilateral negotiations. Creating a tripartite Board of Conciliators consisting of men of standing competence has strengthened the system of bilateral and tripartite social dialogue. In case of strike or lock out in public utility services, the respective government may refer the dispute to a Board of Arbitrators comprising of serving or retired Judges of the High Court or the Supreme Court of Pakistan. The labour judicial system was restructured. The Labour Appellate Tribunals were abolished and appeal against the order of the Labour Court was now lie in the High Court. The Labour Court will now be presided over by a District and Sessions Judge instead of a Additional District and Sessions Judge. A Labour Court while determining a case relating to the termination of a worker shall also have the power to award equitable compensation to the aggrieved worker instead of reinstatement in service. The penalty of imprisonment under the laws relating to industrial relations was dispensed with, while the amount of fine has been substantially enhanced to act as deterrent. The terms "employer", "establishment" and "industry" were redefined. The term of a CBA has been extended to be three years, etc.

The Industrial Relation Ordinance, 2002 was repealed by the Industrial Relation Act, 2008. Some salient features of this Act being:--

(i) The Labour Appellate Tribunals were restored;

(ii) The Labour Court was now to be presided over by a District Judge or Additional District Judge;

(iii) The discretion of the Labour Court of awarding compensation in lieu of reinstatement in service of a worker was taken away;

(iv) Appeal against the order/ decision of the Labour Court would, now, lie before the Labour Appellate Tribunal instead of the High Court;

(v) Punishment of imprisonment for defaulter instead of fine only was restored; etc

But the most significant feature of the Act of 2008 was its automatic repeal on 30th April, 2010 as provided in its Section 87(3) which reads: This Act shall, unless repealed earlier, stand repealed on 30th April, 2010. The Industrial Relation Act, 2008, eventually stood repealed on the cut off date. Surprisingly no legislation on the subject was made for about two months either to supersede IRA 2008 or to extend its life. Mean while, a historical Constitutional development took place in the country.

On the 29th April, 2010, the President passed the Constitutional (Eighteenth Amendment) Act, 2010 (Act X of 2010) bringing in some very fundamentally radical changes in the Constitution. A new Article 270-AA was substituted for the existing Article 270-AA sub-article (6) of Article 270-AA provided life to all the laws in force on the day the Act X of 2010 received the assent of the President. The Concurrent Legislative List was omitted giving the provinces Constitutional competence to legislate, inter alia, on the subject of Labour Welfare, Trade Unions, Industrial and labour disputes etc.

In the Punjab, the Punjab Industrial Relation Ordinance, 2010 was promulgated on the 13th June, 2010 which was to last till the 10th September, 2010. The Punjab Assembly gave it a further lease of 90 days life through its resolution on 23rd July, 2010. The same was, however, repealed by the Punjab Industrial Relation Act, 2010 on 9th December, 2010

In consequence of the provincialisation of the labour laws, the National Industrial Relation Commission (NIRC) was abolished. All the cases pending before it stood transferred to the Labour Appellate Tribunal, Labour Court and Registrar having jurisdiction in the matter. The Labour Court was competent to deal with cases of unfair labour practices and try offence punishable U/S 68 of the Act. Federation of industry-wise trade union or federation at the provincial level may raise an industrial dispute before the Labour Appellate Tribunal __________ all this previously being within the jurisdiction of the erstwhile NIRC.

The Sindh Assembly passed the Industrial Resolution (Revival and Amendment) Act, 2010 reviving the IRO 2008, w.e.f 1st May, 2010 as if it was never repealed.

The Khyber Pakhtun-Khwa Industrial Relation Ordinance was promulgated on 14th July, 2010.

On 22nd July, 2008, Balochistan Industrial Relation Ordinance was issued to be repealed by Balochistan Industrial Relation Act, 2010 on 15th October, 2010.

On the 30th April, 2010, when the "Sunset" for the Industrial Relation Act, 2008 and there being no labour law in the field, the National Industrial Relation Commission (NIRC), Labour Appellate Tribunal and the Labour Courts in the country lost their existence resulting in a serious legal chaos.

The National Industrial Relation Commission, Islamabad had an occasion to deal with the question of legal complications created by the absence of any labour laws in the field. The NIRC, answered that in terms of "the 18th Constitutional Amendment" the IRA 2008 was intact and fully operative till altered, amended or repealed by the competent authority.

In Lahore, the Honourable Chief Justice, Lahore High Court initiated suomot action and disposed of a Constitutional petition (WP No. 1076 of 2010) on the basis of a report by the Chief Secretary, Punjab that IRA, 2008 stood protected uptill 30-06-2011 by Article 270-AA of the Constitution.

In Sindh, the High Court of Sindh, in the matter of Industrial Relation Advisors' Association (2010 PLC 359) declared the IRA, 2008 repealed but restored the IRO 1969 relying upon the strength of Sec-6 of the General Clauses Act.

The Islamabad High Court in Tufail Ahmed's case (WP No.4917 of 2010), relying on Industrial Relation Advisors' Association case, held that the IRA 2008 stood repealed by the provisions of its sec 87(3) but ignored that the IRO 1969 was revived in consequence.

The Supreme Court of Pakistan examined thoroughly and comprehensively dealt with the effect and consequences of the "Sunset" law i.e Sec 87(3) of the IRA 2008 and the complications arising out of the interregnum period in the Constitutional Petition No. 24 of 2011 (Air League of PIA employees VS the Federation of Pakistan etc, 2011 SCMR 1254). The Apex Court, after thoroughly glancing through a catena of judgments having bearing on the proposition in hand, opined that Sec 87(3) remained operative in its full force even after the IRA 2008 having been protected by clause (6) of Article 270-AA of the Constitution. Therefore, it {SEC 87(3)} killed the said Act (IRA 2008) on 30-04-2011. It was held, that on repeal of IRA 2008 on the cutoff date, no other law earlier repealed, including IRO, 1969, could occupy the field. Held further, that the mandate of Sec 6 of General Clauses Act and Article 264 of the Constitution did not provide that on repeal, the law previously in field would stand revived as these provisions, in broader sense, had attached finality to the actions which were already done. It was concluded that the IRO, 1969 did not revive after the repeal of IRA 2008.

The question that after the expiry of IRA 2008 on 30-04-2011, which provision of law would take effect for the interregnum period i.e till the Provincial Assemblies enacted respective laws on the subject, was also taken up and answered in the following terms:

The Labour laws being essentially procedural in nature, the IRA 2008 was retrospectively effective i.e w.e.f 01-05-2010. As the Province of Sindh had enacted the Industrial Relations (Revival and Amendment Act, 2010 the IRA 2008 stood revived, catering for the interregnum period. It was concluded that after the promulgation of Provincial Industrial Relation Laws, persons having a grievance could approach the appropriate forum provided therein as mere change of forum did not affect their rights. Held, that during the interregnum, workers had remedy under the ordinary laws prevailing at that time ___________ general laws filling the vacuum in the absence of a special law.

Finally, as to the vires of the Provincial Labour Law on the ground that how the institutions/ corporations having country wide branches and Trade Unions could be registered under the legislation of a specific Province, it was observed that this question could not be considered in the petition in hand which has been filed under Article 184(3) of the Constitution. However, the Honourable Supreme Court alluded to the provisions of Article 144(1) of the Constitution which provided mechanism for making Central Legislation in respect of matters not covered in the Federal Legislation List and which could be resorted to when essential.

In summing up, it can be said that five parallel factors are involved in the industrial relations system of Pakistan, namely:--

(i) Representative Trade Unions that have been registered and certified as CBA of the establishment in accordance with the provision of law are perceived as public instrument with a function directed to the effective administration of the Industrial Relations laws. The scheme established in the law for the regulation of employer-employee relation depends on the proper workability of the collective bargaining.

(ii) Collective bargaining has been taken as a step in the adjudication oriented procedure for the settlement of industrial disputes. It is accompanied by conciliation; (in case of industrial dispute of national importance a Triplicate Board of Conciliators intervenes); voluntarily arbitration and recourse to Labour Court superimposed of course, by the NIRC.

(iii) Joint Works Council as an alternative to 'force majeure' in the industrial bargaining.

(iv) Shop Stewards perceived as on the job bargaining and to settle local grievances.

(v) Participation in the joint management through the joint Works Council aimed at democratizing the work relation in the establishment.

In spite of the fact that the successive legislations in this area have bestowed substantial privileges and have assisted in increasing the bargaining power of the trade unions, they are still weak and collective bargaining in true sense is still not evenly balanced. The industrial relations framework, as has emerged, is now increasingly regulating the form and content of trade union movement and for that matter of the industrial relations also. It is obvious that by exerting the pressure of organized labour coupled with the support of the government, the unions have been successful in increasing the share of workers in business earnings.

Whether the recent provincialsation and devolution, inter alia, of subject of Industrial Relations and Labour Welfare laws augurs well for the achievement of the cherished goals as envisaged by the Constitution, it all depends on the political will of the Government and bonafides of all the stake holders in implementing the amended provisions of law.