Industrial Relations Ordinance, 2011: Inconsistencies, anomalies and omissions - I

The Industrial Relations Ordinance, 2011 has been promulgated by the Ministry of Law, Justice and Parliamentary Affairs on 18th July 2011. It extends to the whole of Pakistan and apply to all persons employed in any establishment or industry in the Islamabad Capital Territory or carrying business in more than one Province.
The preamble to the Ordinance claims that it aims to consolidate and rationalise the Law relating to formation of Trade Unions and improvement of relations between employers and workmen in the Islamabad Capital Territory and what the Ordinance describe "Trans-Provincial" Establishment and Industry. Under the Constitution of the Islamic Republic of Pakistan, 1973, prior to 18th Amendment, there was a Concurrent Legislative List and Labour Trade Unions, Industrial and Labour disputes were listed as item No 26 and 27 of the Concurrent Legislative List.
Thus both the Federal Government and the Provincial Government could simultaneously promulgate the legislation in relation to Trade Union Industrial and Labour Disputes, welfare of labour, condition of the Labour etc. However, as a result of the Constitution (18th Amendment) Act, 2010 passed by the Majlis-e-Shoora on 20.04.2010 , Concurrent List has been abolished and in other words now it is only for the Provincial Government who are constitutionally entitled to frame legislations in relation to Trade Unions and Industrial and Labour Disputes.
In Constitution Petition No 24/2011 in the case reported as 2011 SCMR 1254 titled Airleague of PIAC Employees Vs. Federation of Pakistan, Ministry of Labour and Manpower Islamabad, the full bench of the Supreme Court of Pakistan presided over by the Chief Justice of Pakistan announced on 2nd July 2011, that the 18th Constitutional Amendment has abolished the Concurrent Legislative List and the Federal Government has lost the power to legislate regarding Labour Welfare except recourse to the provisions of Article 144(1) of the Constitution, which provide that if one or more Provincial Assemblies pass resolution to the effect that the Majlis-e-Shoora (Parliament) to regulate any matter not enumerated in the Federal Legislative List , then alone, such a law could be passed by the Parliament.
In other words, Trade Union Industrial and Labour Disputes are now to be enforced by each Province to be dealt with under the Labour Law promulgated by these provincial governments and workmen are to avail remedy either through Labour Court or Labour Appellate Tribunal established by the provincial governments.
Neither of the four Provincial Assemblies in terms of Article 144(1) of the Constitution of Pakistan have passed the Resolution authorising the Parliament to frame Legislation on their behalf. Notwithstanding this constitutional impediment, Industrial Relations Ordinance, 2011 has been promulgated by the Federal government, extending its sphere to the whole of Pakistan including Islamabad Capital Territory and also in relation to those Establishments which are in more than one Province.
To this extent, the Industrial Relations Ordinance, 2011 is not only ultra vires the Constitution, 1973 but ultra vires Constitution (18th Amendment) Act, 2010 and in fact is in violation of the Article 144(1) of the Constitution of Pakistan, 1973 and very obviously in Contempt of the decision of the Apex Court in Airleague of PIAC Employees case.
The Federal government has promulgated the Industrial Relations Ordinance, 2011. Its preamble provides that it aims to consolidate and rationalise the law relating to formation of trade unions in not only Islamabad Capital Territory but in Trans-Provincial Establishment and Industry throughout the country. The law in terms of Section 1(3) does not apply to police or defence service of Pakistan or any service or installations including armed forces of Pakistan or those employed as workmen in the administration of the State.
However, members of the security of the Pakistan International Airline and Pakistan Security Printing Corporation or Security Papers Limited and Establishments for treatment and care of sick, infirm, destitute or mentally unfit persons other than those run on commercial basis are excluded from the ambit of this Ordinance.
This law is clearly discriminatory and in violation of Article 25 of the Constitution of Pakistan as also in violation of Article 17 of the Constitution which guaranteed Freedom of Association. It is unfortunate that although the Supreme Court of Pakistan in the case of Civil Aviation, reported in 1997 PLC 653 has dealt with this aspect of the matter, yet for no reason, the principle laid down by the apex court continue to be defied, ridiculed and not followed leading to chaos situation in the Industrial Relations System in this country.
In the preamble, it is also mentioned that this law has been framed to improve relation in the Islamabad Capital Territory. Islamabad is not a province. Nonetheless even after expiry of the Industrial Relations Act, 2008 on 20.4.2010, Islamabad continues to have the Labour Court and even the Labour Appellate Tribunal. Even if this preamble as defined is to prevail, then previous all Orders passed by the Labour Court and the Labour Appellate Tribunal after 1st May, 2010 upto 18th July, 2011 are quorum non judice and non est.
The word "Commission" has been defined in Section 2 (vi) to mean "Industrial Relations Commission". This is going to lead to an anomalous position as even in Balochistan Industrial Relations Act, 2010 in terms of Section 2 (e), Law has defined "Commission" also to mean "Industrial Relations Commission.
There is one Industrial Relations Commission in Balochistan appointed by the Balochistan provincial government and another commission namely Industrial Relations Commission by the Federal government on all-Pakistan basis including Balochistan. This will only add to chaos and confusion and will be in violation of devolution of power and the Constitution 18th Amendment, 2010.
Section 2(x) of the Industrial Relations Ordinance, 2011 defines establishment as meaning any Office, Firm, Factory, Society, Undertaking, Company, Shop or Enterprise for the purpose of carrying on any business or Industry including all Departments and Branches in Islamabad Capital Territory or those falling in more than one province whether situated in the same place or in different places constitute an "Establishment".
For example in case like the MCB Bank Limited, Allied Bank of Pakistan Limited, United Bank Limited, Habib Bank Limited, National Bank of Pakistan having branches in more than one province. They all will constitute an "Establishment".
This law has been framed for application of IRO 2011 to such establishments. Likewise WAPDA, KESC, PTCL, PIA, Utility Stores, Trading Corporation of Pakistan, Railway to name only few are those establishments who have departments and branches in more than one province. Even Industrial Relations Ordinance, 2011 has apparently been promulgated to cater to the needs of such establishments.
The application of Provincial Industrial Relations Law after 1st May, 2010 upto 18th July, 2011 provide for proceedings in relation to such establishments including Provincial Labour Appellate Tribunal cases, instituted prior to 18th July, 2011 are liable to be effected as they can no longer proceed in the Labour Court and the Labour Appellate Tribunal of the Province.
There is no provisions in the Industrial Relations Ordinance, 2011 to transfer these case to the National Industrial Relations Commission and therefore, these proceedings before the Labour Court and the Labour Appellate Tribunal stand abated. This will add to the suffering and misery of the working class.
Section 2(xii) defines Government as meaning Federal Government. The words "Group of Establishments" has been defined in Section 2(xiii) to mean the establishment belonging to the same employers and the same Industry. In other words, if there is one employer having more than one textile mills, it will constitute group of establishment and number of trade unions stand registered either at the national level or even at the provincial level.
Where one trade Union has been formed in relation to the establishment belonging to different employers, such Unions cease to exist if there is conflict between Provincial Labour Legislation and the Federal Labour Legislation than to this extend the Federal Labour Legislation will prevail and therefore, the status of such Trade Union already registered belonging to different employers cease to exist and do not require even order for cancellation of those unions.
The term Industrial dispute has been defined in section 2(xvi)) to mean dispute between the employers and employers or between employers and workmen or between workman and workman. It is regretted that since the Industrial Relations Ordinance, 1969 was promulgated which had defective definition of the term Industrial Disputes, the same definition continue to prevail and that although repeatedly this defect has been pointed out this defect continue to exist.
There cannot be an industrial dispute between any employer and employer nor there can be any industrial dispute between an employer and a workman. The concept of Industrial Dispute recognised in Industrial Relations Law is a dispute between Employer and Collective Bargaining Agent, and that also should be restricted and confined to employment, non-employment, terms of employment or condition of work in relation to any workmen and not for enforcement of predetermined and pre-determined and pre-existing rights guaranteed and secured either to the Employers or the Collecting Bargaining Agent by and or under any law, settlement or award.
In terms of section 2(xvii) the term Industry has been defined as meaning any business calling, employment or occupation for production of goods or provision of service in Islamabad Capital Territory and in industry in more than one province. Even this definition is defective. The concept of industry means any economic activity of producing goods and material service.
In other words, those establishments set-up either for charitable purpose and are operating through public or private donations, either in the field of education, medicine and other general relief work for the poor and indigent, like Abdul Sattar Edhi, Alamgir Welfare Trust, Ramzan Chhipa Ambulance, Saylani Welfare Trust and Anjuman-e-Hayat Islam etc are establishments under IRO 2011 even though for charitable purposes.
The phrase "exclusively for charitable purposes" is very wide. It should be necessarily be incorporated that establishments operating either through public or private donations exclusively do not constitute industry. It appears there is a typographical error in the definition of the term industry in section 2(xvii) in as much as after the words " falling in more than" the word "one", before the word province has been omitted.
Trade Unions having membership in more than one province in a group of establishment should be owned by one employer. In section 2(xxvi), the word registered and the union means a trade union registered under the Industrial Relations Ordinance, 2011. This will create further problems and complications as even Trade Unions were earlier registered by the National Industrial Relations Commission and they do not stand protected as those Unions were registered either under the Industrial Relations Ordinance 1969, Industrial Relations Ordinance, 2002, Industrial Relations Act, 2008, but all at the time when the labour and trade union and its registration was on the Concurrent Legislative List.
Section 2(xxviii) defines Rules and Regulations as meaning Rules and Regulations which have been made under the Industrial Relations Ordinance, 2011. NIRC (Procedures and Functions) Regulations 1973 do not stand protected and National Industrial Relations Commission on the assumption that the Industrial Relations Ordinance, 2011 is a valid legislation, will have to be governed by altogether fresh Regulations promulgated in consultation with and the prior approval of the Judiciary.
The word "Trans Provincial" has been defined in section 2(xxxii) to mean any establishment, group of establishments, industry, having its branches in more than one Province. The word "Trans" is not a legal dictionary term. It definition does not appears in Blacks' Law Dictionary, Revised Fourth Edition, nor in Ballentines Law Dictionary, Third Edition, No such word is legally defined in Legal Thesaurus by William C. Burton. This phrase "Trans Provincial" does not even appear in the Constitution of Pakistan, 1973 nor in the Federal Legislative List either in Part I or Part II.
In Item No 13 of Part II of Federal Legislative List the item refers is "Inter-provincial matter and co-ordination". This above phrase is not similar or akin to "Trans Provincial" Even in IRO 2011, the expression used in Section 57 (5) explanation is industry-wise trade unions and Federation of such trade union and federation of such trade unions.
In flagrant violation of Constitution (Eighteenth Amendment) Act 2010, the phrase "trans-provincial" has been coined and an artificial meaning assigned to cover industry-wise trade unions in more than one province, which is violation of Constitution (18th Amendment) Act, 2010. IRO 2011 is ultra vires the Constitution of Pakistan, ultra vires the Constitution (Eighteenth Amendment) Act, 2010 and in wilful disobedience and contempt of the decision of the Apex Court in the case of Air League and in violation of Article 144(1) of the Constitution of Islamic Republic of Pakistan, 1973 and is liable to be struck down by the high courts and the apex court.
The word "worker" has been defined in section 2(xxxiii). This definition even includes a Supervisor to be a workman and it also include a dismissed, discharged, retrenched, lay off, or otherwise any person otherwise removed from employment in connection with or as a consequence of dispute or whose dismissal, discharge, retrenchment, lay off or removal has led to that dispute but does include any person employed mainly in managerial or administrative capacity.
Persons engaged in direction, administration, management, supervision and control of the establishment or any part thereof are not excluded from the ambit of this definition. This definition has changed the basic concept of "core function" in defining the term workman. This will add to further chaos and confusion.
The term "Trade Union" has been defined in Section 2 (xxxi) as meaning apart from combination of workmen a combination of employer. It is difficult to appreciate combination of employers being identified as a Trade Union. Employers forms Association and not Trade Unions. The term "Trade Union" be restricted and confined to a combination of workers or workman and employers should not be identified in the said definition.
In term of section 3 of the Industrial Relations Ordinance, 2011 Trade Union and Freedom of Association has been discussed. This law recognised Freedom of Association in terms of Section 3(a). Unfortunately, this provision is in conflict with section 1(3) to the Industrial Relations Ordinance, 2011, which specifically exclude large category of employees from the ambit of Industrial Relations Ordinance, 2011.
Furthermore the welcome salient features of first proviso to section 3(a) is that in establishment where women are also employed, the Trade Union shall include the women in the executive of the said Trade Union in the same proportion in which they are employed in the establishment. This recognises the growing need of the emancipation of women in our society.
Section 4 of the said Ordinance provides for appointment of a Registrar of Trade Union to be assisted by one or more Joint Registrar. Industrial Relations Ordinance, 1969 or all other provincial legislations in each of the four provinces, the Registrar of the Trade Union do not form a part of the Institution termed as Labour Judiciary. Unfortunately, experience since 1973 onwards have shown that since the Registrar of Trade Union is also a part of the National Industrial Relations Commission, this breeds uncertainty, chaos and accusing fingers raised which are not raised in the case of the Provincial Registrar of Trade Unions.
The Labour Court and the Labour Appellate Tribunal in the Provinces are two organs of the Labour judiciary. National Industrial Relations Commission is the third organ of this labour judiciary at the national level. If the process of registration of a trade union is not assigned to the judiciary in the provinces, on the same analogy, the registration of Industry Wise Trade Union in more than one province should not be part of the judiciary ie National Industrial Relations Commission, but effected altogether separately There cannot be a combination of the Executive and Judiciary in one and the same institution.
This will be a violation of Article 175 of the Constitution, which specifically provides, judiciary to be separate from the executive. Registration of a Trade Union is merely an executive function. If the National Industrial Relations Commission, is at all required to be established, it should be merely a Judicial Institution with no executive function of registration of a Trade Union, or issuance of Certificate of Collective Bargaining Agent or unit, all of which are executive function. Registrar of Trade Union if separated from the National Relations Commission will not be subservient to the said Commission and will work independently as presently done in each of the four Provinces, where Registrar of Trade Unions work independently.
Section 6 proviso to IRA 2011 provide that there shall be at least two Trade Unions in an establishment. The wisdom of at least two Trade Unions is difficult to appreciate. Consequences of there being less than two Union in the establishment has been not mentioned.
In terms of Section 8, proviso to Industrial Relations Ordinance, 2011, the condition of 25% outsider also being workmen has been excluded. If the intention of the legislature is that 75% of the executives could be workers in the establishment and the rest of 25% outsiders be anyone, then even an employer can have outsider status of 25% of the executives, and hold office of President and General Secretary and thereby defeat the very purpose and spirit of the Trade Union as only the General Secretary can serve Charter of Demand, raise Industrial Dispute, conclude settlement with the employers and even initiate proceedings in the Labour Court and the Labour Appellate Tribunal.
Incorporation of this proviso is ill-advised and should be deleted. Furthermore Section 8 (2)(a) lay down an explanation, which provides that a dismissed, terminated, retrenched workers, whose dismissal, termination or retrenchment is pending adjudication before a court of competent jurisdiction shall be deemed to be an employed person in that establishment. This explanation will lead to misgivings and confusion.
Apparently the intention of the legislature is that dismissed, terminated and retrenched workers shall be deemed to be workmen for the limited purpose of having their claim for wrongful dismissal, termination or retrenchment determined by the Labour Court. If this is the intention than the explanation falling in section 8(2) (a) has been poorly drafted and be suitably amended.
Section 9(2) only provides for right of appeal to the Commission by a Trade Union. There is no right of appeal against a wrongful registration of Trade Union. This section will lead to Registrar of Trade Union blackmailing the employer on terms dictated by him, on pain of Registration of a Trade Union. It is essential, however, that Registrar Trade Unions exercise due diligence and verification of facts before effecting registration. For due diligence and verification of facts, the source of input could well be the Employer.
The Registrar of Trade Union, whether at the Centre or in the Province till this date have not recorded reasons for registration. The exercise of the arbitrary, whimsical power either to register a Trade Union or refusal to register a Trade Union would be restricted by due diligence. Furthermore, the Registrar of a Trade Union whilst conducting the application is fit either for registration of a Trade Union or refusal to register a Trade Union should assign necessarily, in writing, reasons for such an order, which could be able to stand the test of judicial scrutiny.
In terms of section 10 of the Industrial Relations Ordinance, 2011 it is provided that certificate of registration issued by the Registrar of the Trade Union shall be conclusive evidence that it has been duly registered. This does not mean that certificate of registration has been legally effected in accordance with the law which could not be challenged before the judicial forum. This challenge can only be possible if the Registrar of Trade, passes a speaking order giving reasons and grounds for the registration and or refusal to register a Trade Union.
Section 11 of the Industrial Relations Ordinance, 2011 provides for a mode and mechanism for cancellation of the registration of a Union, if there is a contravention of the law or if the registration has been effected in contravention of law or registration obtained by virtue of misrepresentation of facts or the registration has been effected by the Registrar of Trade Union through misinterpretation of the law.
The Registrar of Trade Union alone can apply to the Commission for orders for cancellation of such Unions. This power conferred by the legislature on Registrar Trade Union is arbitrary, uncannalized and does not provide for a procedure to be followed. Furthermore once complaint has been allowed, it should not be withdrawn Arbitrary and discriminatory exercise by the Registrar of the Trade Union to withdraw the complaint for the cancellation except for cogent reasons which can stand the test of the judicial scrutiny, should be avoided. An employer presently is not entitled to apply for cancellation of the registration of Union nor there is any provision in law to make an employer either co-applicant or even a respondent. Application for cancellation of registration of union should be either by the Registrar or any person authorised by him and should also provide that even the employer can apply directly for cancellation of the registration of a Trade Union.
This will to a large extent act as a deterrent against unions committing violation of the law or resorting to illegal strike, slow-down etc. There is no provision in law where if a Union registration is ordered to be cancelled then its Office Bearers are disqualified from being elected as office bearers of any other Union in the establishment. This should necessarily be incorporated in Section 11 of the Industrial Relations Ordinance, 2011. Experience has also shown that for years together trade unions do not submit annual returns duly audited by a Chartered Accountant, nor do they hold annual elections each year.
It should be provided for in law that the annual return should be submitted duly audited by Chartered Accountant notified by the Government of Pakistan from amongst the panel appointed by the government and the annual returns should be submitted within three months of the close of the accounting year, and still further annual election be held within 15 days from expiry of the term of the office of the office bearer of the union. If there are provisions in the constitution of more than one term then no person should hold office for more than two terms. There is no reason why a provision of not being elected office bearer of a Trade Union for more than two terms is not incorporated in the Industrial Relations Ordinance, 2011, as this will give room to other workers to be office bearer of union and reduce union office monopoly by certain set of office bearers.
It is next provided in terms of section 17 of the Industrial Relations Ordinance, 2011 that no transfer of office bearers of a Trade Union be effected during pendency of application for registration of a Trade Union except with the prior permission of the Registrar of a Trade Union. Registration of Union is an executive power under law. Registration of a Trade Union is not a judicial function. Registrar cannot be expected to pass a judicial order either granting or refusing permission to transfer, discharge, dismiss or otherwise. Power of permission to dismiss, discharge, transfer office bearer of a Trade Union during pendency of application for registration be conferred on the Labour Court and in case of Federal Legislation, on Commission assuming its legal status is upheld by Apex Court who alone should decide the fate of the application for such permission within three days on a day to day hearing basis, the time being mandatory and not directory.
Section 18 of IRO 2011 imposes restrictive conditions on a person who is an office bearer or member of a trade Union to be disqualified from being a member or Officer of a Trade Union. This provision of law requires being suitably amended. It should not be restricted only to a sentence for two years on-conviction on moral turpitude as the basis of disqualification for offence but for conviction on any violation of the Industrial Relations Ordinance, 2011 be basis of disqualification to be a member either or an office bearer of Trade Union. Including what are known as "outsider" office bearers of the union. They should also be held liable to be disqualified.
(To be continued)