ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet is likely to approve an amount of Rs 1.244 billion to pay salaries of Pakistan Steel Mills (PSM) employees for the fiscal year 2023-24, as the government has failed to finalize its plan to revive the entity.
Pakistan Steel Mills (PSM) is a wholly-owned entity of the Government of Pakistan. It started incurring losses from 2008-09 and its accumulated losses climbed to Rs. 206.068 billion till June 30, 2022.
Owing to persistent losses, the government of Pakistan has been providing funds for the net salaries of PSM’s employees since 2013. The production operations of PSM have been suspended since June, 2015. Therefore, the entity does not have adequate financial resources to pay for the salaries of its employees.
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In the wake of privatisation process of PSM, the Federal Government decided to retrench the PSM’s employees. So far 5679 employees have been retrenched and approximately 3100 employees are working.
Due to retrenchment of the employees, the salaries of the employees have been reduced from Rs. 360 million per month in 2020-21 to around Rs. 104 million per month at present.
Moreover, PSM has filed a petition in the Labour Court Karachi for retrenchment of the remaining 50% workforce, as according to the clause No.11-A of Pakistan Industrial and Commercial Employment (Standing Orders Ordinance, 1968) no employer shall “terminate the employment of more than 50% of the workmen or close down the whole of the establishment without prior permission of the Labour Court.”
As per orders of Supreme Court of Pakistan vide AGPR’s Circular of May 10, 2018 it becomes obligatory on all Ministries/ Divisions and Departments to ensure disbursement of monthly salary on 1 day of each calendar month.
The salary for the PSM employees is therefore to be released till implementation of the complete Human Resource Retrenchment Plan. In the current Fiscal Year 2023-2024, the Federal government has approved budgetary allocation of Rs. 10 billion for PSM.
The MoI&P has proposed the ECC of the Cabinet to authorize Finance Division to approve the payment of projected net salary of Rs. I.244 billion million for the Financial Year 2023-2024 to be disbursed according to the salary demand of PSM for every month from the already approved budgetary allocation of Rs.10 billion.
Copyright Business Recorder, 2023