Relief package for workers, govt employees, pensioners: Increase in minimum wage dismays business community

ISLAMABAD: The business community has expressed dismay over Prime Minister Shehbaz Sharif’s announcement about increase in the minimum wage of workers to Rs25000 per month.

Shehbaz on Monday, after being elected as the prime minister of Pakistan, announced a relief package for public and private employees. He announced to increase the minimum wage of workers to Rs25,000 per month. He also announced 10 percent rise in salaries for those government employees who are receiving pay up to Rs100,000 per month and to jack up pension of retired civil, and military officials by 10 percent from April 1.

Employers Federation of Pakistan through its President Ismail Suttar and Vice President Zaki Ahmed Khan, in a statement late Monday night said that they have received numerous calls by the industry seeking guidance on the subject and how can the newly-elected prime minister even announce this as there are institutions in place for taking such decisions in the country. It said that the Supreme Court recently disposed of a matter related to the minimum wage announced by the Sindh government. A three-judge bench of the Supreme Court, headed by Justice Umar Ata Bandial, on March 26, 2022, set aside the Sindh High Court (SHC)’s judgment regarding the payment of minimum wage of Rs25,000 to the workers employed in all the industrial and commercial establishments in Sindh.

There are Minimum Wage Boards in each of the province of the country and they are all tripartite having members from the employers, workers, as well as, the government who sit together and decide on the minimum wage which is basically for the unskilled workers just starting with their carriers in the industry.

Many aspects are seen before taking the decision on the minimum wage, which include the cost of doing business in Pakistan and the competing countries with Pakistan and the output of the workforce in comparison with those competing countries who are selling the same products like those being sold by Pakistan. “The business community would like to register its dismay over the announcement and hopes that it stays as a political gimmick only,” said the statement.

Ismail Suttar President Employers Federation of Pakistan rejected any increase in minimum wage as announced by the prime minister. Ismail said the business is still under a recovery phase from the severe impact of Covid and not in a position to make more than 25 % increase in the minimum wage and that too with administrative order. He said minimum wage Board in provinces is the legal institution to decide minimum wage keeping in view inflation and other economic factors. Any increase in wage at this stage without following the mechanism provided in the law will not only be against the legal practice and will not be acceptable. This will also increase the cost of production and competitiveness of exporting industries. He also pointed out that the honourable Supreme Court has fixed Rs 19000 as minimum wage in Sindh and has also clearly clarified that the minimum wage can only be fixed by the minimum Wage Board as per minimum wage ordinance.

Copyright Business Recorder, 2022