Labour Policy, 1972, Pakistan

The fourth labour policy was announced in 1972 by the then ruling Pakistan People’s Party (PPP) government. The PPP was elected on a socialist agenda with a definite “pro-labour” manifesto. The Labour Policy of 1972 had three important dimensions: a) immediate increase in workers’ real wages; b) increased production; and c) promotion of trade unionism and amelioration of the workers’ lot. It included 22 specific points:

1. Workers’ participation in the management of industry;

2. Appointment of auditors by the collective bargaining agent. The auditors were to be paid by employers to audit their company accounts in certain cases;

3. Increase in workers’ share in profits from 2.5 per cent to 4 per cent (and later to 5 per cent) under the Companies’ Profits (Workers’ Participation) Act, 1968;

4. Nomination or election of ‘shop stewards’ in each factory department to take care of workers’ day to day problems;

5. Labour court decisions in 20 days for individual cases;

6. Settlement of disputes through works councils; the councils were to deal with all matters that would go before the labour courts;

7. Both workers or employers permitted to take matters to the labour courts,

8. Curtailment of strike and lockout notice periods from 21 days to 14 days. Strikes, however, linked with a prior secret ballot;

9. Lower supervisory levels in banks included in the definition of ‘workman’;

10. Statement of reasons for termination of services of a worker;

11. Provision of statutory bonus of up to one month’s wages and linked with profits;

12. Payments under the Wages Act, 1936, and the West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance, 1968, made applicable to all contractors;

13. Provision of funds for workers’ housing through the Workers’ Welfare Fund Ordinance, 1971, and representation for workers;

14. Free education up to matriculation for one child per worker by the employer;

15. Workers’ 2 per cent social security scheme contribution dropped, employers’ contribution raised from 4 per cent to 6 per cent;

16. Introduction of old age pension for workers;

17. Compulsory group insurance against death and injury for off-duty workers;

18. Extension of social security to domestic servants;

19. Revision of laws governing safety measures and workmen’s compensation against death and injury;

20. Introduction of a group incentive scheme;

21. Creating a quasi-judicial body – the National Industrial Relations Commission

(NIRC) – to promote genuine trade unionism, help form unions and federations (at the industry and national levels), and to deal with cases of victimization and unfair labour practices; and

22. Eventual linking of wages to prices, but no immediate increase in cash wages.

As a follow-up to the policy, specific measures taken related to: a) amendments in the

Industrial Relations Ordinance, 1969, and the West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance, 1968; b) enactment of the Workers’ Children (Education) Ordinance, 1972; c) enactment of the Employees’ Old-Age Benefits Act, 1976; and d) enactment of the Employees’ Cost of Living (Relief) Act, 1973.

Furthermore, restrictions on trade union registration were removed, thus encouraging more trade unions.