Amendments to labour laws : Parvez Rahim Writes in Dawn

Category: Labour Laws, News

Amendments to labour laws : PARVEZ RAHIM (Karachi) Writes to Editor Dawn

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A DOUBLE bench of the Sindh High Court has, vide its judgment dated Feb 26, declared the amendments carried out to five of the labour laws in 2007 as invalid on technical grounds.
The said judgment has not affected the benefits derived by workers by virtue of those amendments as much as in the ones made available to them under the Companies’ Profits (Workers’ Participation) Act, 1968.
As mentioned in the letter (Aug 13), workers employed by contractors will no longer be eligible for receiving the share in the Workers’ Profit Participation Fund (WPPF) amounting to Rs28,000 a year at an average, i.e. four times of the prevailing minimum wage of Rs7,000 a month.
Besides the above, another critical issue is being faced by companies contributing huge amounts every year to the Workers Welfare Fund established by the government.
One of the amendments carried out to the aforementioned Act had enhanced the wage limits for distribution of benefits to workers in two of the slabs. In the third highest slab the wage ceiling was removed by amending the slab of ‘exceeding Rs7,500 but not exceeding Rs10,000’ to ‘exceeding Rs15,000’.
This removal of wage ceiling made all the employees falling within the definition of ‘worker’ given in the Industrial Relations Act eligible for receiving the share in the WPPF. It implied that each of the unionized staff in a company had become entitled to receive an amount of more than Rs. 20,000/-, as one-time payment during a year.
Due to court judgment the old slab imposing the maximum wage limit of Rs. 10,000/- has been revived, which means that almost none of the employees who had received share in their company’s profit in the previous two years, will receive it now.
These aggrieved employees belong either to multinational companies or other profit-making companies, which pay under this head millions of rupees to the government as good corporate citizens. Employees drawing a monthly gross salary of up to Rs.10,000 are now eligible to receive share in the WPPF. There will hardly be any employee in these companies whose monthly salary will be less than this wage ceiling. Hence they will not receive the benefit.
Under the Act companies have to make payment of their share in the workers welfare fund to the government within nine months from the end of their respective financial years.
Usually they would make this payment soon after the finalisation of their accounts for the year. Those amongst them whose financial year ended on Dec 31, 2010, deferred the payment till Sept 30, in order to get some guidance from the federal government on the two issues mentioned above, which have cropped up consequent upon the court judgment. However, no response has been received from the government so far, as a result of which the affected companies are perplexed as to what decision should they take in this matter. On the other hand, eligible workers are also exerting pressure on their respective managements to resolve the issue without further delay.
Labour matters have been transferred to the respective provincial governments after the 18th Amendment to the Constitution. However, answers to employers’ queries whether or not to pay the share in the WPPF to their contractors’ employees and their own employees drawing a monthly salary of more than Rs10,000 must be provided to companies by the federal government, which was respondent in the case, before September 30.

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6 thoughts on “Amendments to labour laws : Parvez Rahim Writes in Dawn

  1. Syed Arshad Ali

    This is not fare the minimum wage is announced by the govt now is 14000 per month but the all worker not received 14000 please allowe to distribute wppf among the all workers and don,t mentioned minimum wage scale (this is workers rights)

  2. Khalil ur Rehman

    he is eligible for WPPF, however it also depend on catagories made by your company.

  3. Asif


    Can any one know that if any employee have 10303 monthly gross salary then he is eligible for the WPPF or not as on date 7 sep 12 for the company’s profit of year 2011, his salary was 10303 on 31-dec-11.if any one have idea please reply. on

  4. Abdul Wahid Osman Belal

    When mentioning or referring to court decisions and rulings it is an invariable custom, usage, and practice to quote what is called and known in legal parlance as as citation which please do to facilitate visiting it there for those who want to and care? Thanks. Regards.


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