ASSIGNMENT NO 1

BUSINESS LAW

If workers are retrenched / redundant is there any scheme to provide employment

else where. If not can such scheme be introduced in our country?
Redundant is person with out a job because there is no more work available in the
company, not needed or useful. “Retrenchment” is done when the company is facing
some difficult situation and it has to downsize its employees for purpose of cost
reduction.
In west or most of the European countries there are schemes which provide employment
to the redundant / retrenched workers because they regard the services of the employees
who worked for their companies. In addition, in west managers are encouraged to give
advance notice of retrenchment to the union and other relevant agencies so that there is
adequate time to arrange for the affected employees to be placed on other jobs or contact
to CareerLink@wda to assist them in seeking alternative employment.
Now if we look at Pakistan we will see that retrenchment of workers has been discussed
in the light of different laws. As the employment law of Pakistan mentions “Pakistani
laws establish procedures for terminating employees, although unions-especially in the
public sector-can resist lay-offs. Either the employer or the employee may terminate
employment upon serving one month of notice or (for an employer) granting one month
of salary. Hourly paid workers who are retrenched must be given either two weeks' notice
or two weeks' wages.”
In the Industrial and Commercial Employment Ordinance Standing Orders (SO) special
provisions have been enacted concerning the choice of the “workmen” to be retrenched
first (section. 13, SO) and the priority of re-employment of retrenched workers (sec. 14,
SO). It means that in laws importance is given to the reemployment after retrenchment of

the workers.
Practically in Pakistan we do not have any scheme of providing jobs to the redundant
workers. As unemployment is a central problem of Pakistan because when unemployment
is high, resources are wasted and people’s incomes are depressed; during such periods,
economics distress also spills over to affect people’s emotions and family lives. The socio
economics system of Pakistan and institutions has failed to provide employment to the
increasing labor force. Following are the facts of Pakistan which shows that why Pakistan
is not working on programs of providing jobs to the redundant workers:
• The population growth is 2.2 % and the rate of GDP is just 7 %.
• The poverty rate in Pakistan for the year 2005-06 is 30 %. 49.18 million
Pakistanis are in the labor force and the unemployment is growing at an alarming
rate of 7.5 % for the year 2007.
• Nearly two-third of the total adult population (and as much as three-fourths of the
adult female population) can’t read or write. It means this illiterate population,
addition to the unemployment ratio.
• Coupled with the decline in jobs abroad, the economy’s capacity to generate
employment opportunities has been decreasing, which can be figured out from the
low growth rates. With the high rate of population growth, the figure for
unemployed Pakistanis are likely to go up further.
• The unemployment rate is 7.5 % for 2008, 30% living below poverty.
• Employment in the private sector absolutely stopped because they shifted their
capital to other countries because of nationalization of industrial units badly
affected the investment industrial sector.
• Karachi is the biggest industrial base of Pakistan, but investors are reluctant to
invest there because of unrest and violence.
• Lack of infrastructure and facilities in the field of energy, telecommunication and
transportation also prevent the industrialist from setting up new industries.
• The government is not involving in capital expenditures which create more jobs.
 • Opportunities are not enough and system of reference is so much indulged in our
society that if a company needs employees then workers of that company will
provide some resume to them of their relatives and friends so in this way many
people don’t get the opportunity to apply for those jobs.
• Speed of privatization.
In the light of above facts we can say that there is strong relationship among population,
GDP, literacy rate, investment level and unemployment. The population is growing at
high rate which will generate the problem of unemployment and in the country like
Pakistan where the GDP rate is lower than rate of inflation and the investment either from
government or private sector is limited, it would be difficult to employ more people in to
jobs so when more people will try to come nepotism and corruption in companies will
take place. So the whole cycle can not be broken.
In Pakistan the many of the employees are retrenched like the Coca Cola company forced
38 employees into accepting redundancy, despite the court order, over December 24-26.
In PTCL workers have opted Voluntary Separation Scheme (VSS) meaning there by
concentration of unemployed people. The 60 percent of employees opted for the VSS.
Among the 44,000 employees the 26400 employees quit the service and put a negative
impact on the overall economy of Pakistan.
In context of these happenings we can say that such schemes should be there who help
the employees in finding out jobs after retrenchment but the Pakistan’s recent situations
then stop us from doing so.