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Labor Relations

Labor Relations
Labor relations can refer broadly to any dealings
between management and workers about
employment conditions. Most commonly, however,
labor relations refer to dealings between
management and a workforce that is already
unionized, or has the potential to become
unionized. Labor relations is thus crucial to
industries like autos and airlines with heavily
unionized workforces.

A Union is an organization of workers, acting
collectively, seeking to promote and protect its mutual
interests through collective bargaining
HRM practices in unionized organization consist of
following policies and procedures laid out in labor
contracts. These contracts typically stipulate:
terms and conditions of employment

Why Employees Join Unions
Higher wages and benefits: the
strength of large numbers and negotiating
skills of professional bargainers give
unions an advantage over individuals

Greater job security: collective
bargaining contracts limit managements
ability to arbitrarily hire, promote, or fire

Influence over work rules: unions
represent workers and define channels for
complaints and concerns

Major Unions in Pakistan

Major Federations
All Pakistan Trade Union Federation
Pakistan Workers' Federation
All Pakistan Federation of Labour
All Pakistan Federation of Trade Unions
All Pakistan Federation of United Trade
All Pakistan Trade Union Congress
Pakistan National Federation of Trade
Muttahida Labour Federation Pakistan
Pakistan Mazdoor Mahaaz
Pakistan Labour Federation (PLF)
Other Federations
Port Workers' Federation
All Pakistan Govt. Employees Federation
All Pakistan Transport Workers' Federation

Major Unions
K.P.T Labour Union
Railway Worker's Union Pakistan
Wapda Hydro Electric Central Labour Union
People's Unity of PIA Employees
P.T.C.L Worker's Union
All Pakistan PWD Worker's Union
Pakistan Brick Kiln Labour Union
Pakistan Postal Worker's Union
K.E.S.C Labour Union
Other Unions
All Pakistan Clerical Association
Pakistan Air Line Pilot's Association

Collective Bargaining
What is collective bargaining?
The negotiation, administration, and interpretation of a
written agreement between two parties, at least one of
which represents a group that is acting collectively, that
covers a specific period of time

Collective Bargaining takes into account two parties-the union and the
Organization representatives:
1. Large corporations have HRM departments with industrial relations
experts; corporate executives, and company lawyers also participate
2. In small companies, the president typically represents the company

Union Representative:
1. Union bargaining teams include an officer of the local union, local shop
stewards, and reps from the international/ national union

Watching over these two parties is the government to ensure rules are
followed and to intervene if mutual agreement is not reached

Collective Bargaining Participants

In Pakistan, under Industrial Relations Ordinance 2002, a Joint Works
Council must be set up in any establishment employing fifty persons or
It should consist of no more than ten members, forty per cent of which
are workers representatives.
The employer's representatives on the Joint Works Council shall be
from amongst the Directors or their nominees or senior executives and
the workers' representatives shall be the office bearers of collective
bargaining agent or their nominees or from workers elected in the
prescribed manner, in case there is no collective bargaining agent.

The Joint Works Council shall deal with the following matters, namely:
(i) improvement in production, productivity and efficiency;
(ii) provision of minimum facilities for such of the workers employed
through contractors as are not covered by the laws relating to welfare of
(iii) promoting settlement of differences through bilateral negotiations;
(iv) promoting conditions of safety and health for the workers;
(v) encouraging vocational training within the establishment;
(vi) taking measures for facilitating good and harmonious working
conditions in the establishment;
(vii) provision of educational facilities for children of workmen.

Collective Bargaining Process
Contract Administration
Union Ratification
Contract Negotiations
Preparations for Negotiations
Collective Bargaining & Agreements in Pakistan
To determine the representative character of the
trade union in industrial disputes and to obtain
representation on committees/ boards /
commissions, the Industrial Relations Ordinance
makes provision for the appointment of a Collective
Bargaining Agent (CBA).
The CBA is a registered trade union elected by secret
ballot. The CBA is entitled to undertake collective
bargaining with the employer or employers on

Resolution of Collective Labor Disputes
* Commencement of a dispute

Under the IRO 2002, if an employer or a Collective Bargaining Agent finds that an industrial dispute has arisen or is
likely to arise, they may communicate their views in writing to the other party. Upon receipt of the communication, the
other party has fifteen days (or more if agreed) to try and settle the dispute by bilateral negotiations.


If the parties do not manage to reach a settlement, the employer or the CBA may, within fifteen further days, serve a
notice of conciliation on the other party, with a copy to the Conciliator and to the Labour Court.

If the dispute is settled before the Conciliator, or a tripartite Board of Conciliators, a report is sent to the Provincial or
Federal Government, with the memorandum of settlement.

* Arbitration

If the conciliation fails, the Conciliator tries to persuade the parties to refer their dispute to an arbitrator. If they agree,
the parties make a join request in writing to the arbitrator they have agreed upon.
The arbitrator gives his or her award within a period of 30 days or a period agreed upon by the parties. The award of the
arbitrator is final and valid for a period not exceeding two years.
A copy of the award is sent to the provincial or Federal Government, for publication in the official Gazette.

Proceedings of Strikes
If dispute settlement proceedings before the Conciliator fail and no settlement
is reached, and if the parties have not agreed to refer their dispute to an
arbitrator, the workers retain the right under section 31 of the Industrial
Relations Ordinance 2002, to go on strike providing due notice to their
employer within seven days
Where a strike lasts for more than fifteen days, if it relates to a dispute which
the Commission is competent to adjudicate and determine, the Federal or the
Provincial Government may, by order in writing, prohibit the strike at any time
before the expiry of thirty days, provided that the continuance of such a strike
or lock-out causes serious hardship to the community or is prejudicial to the
national interest
Under section 32 of the IRO 2002, if a strike or lockout occurs within the public
utility services sector the Federal Government and the Provincial Government
may, by order in writing, also prohibit its occurrence at any time before or after
the commencement of the strike

Illegal Strikes
A strike or lockout is declared illegal if it is commenced
without giving notice of conciliation to the other party of
the dispute, or if it is commenced or continued in a manner
other than that provided by the IRO 2002 or in
contravention with this text.
In case of an illegal strike or lockout, an Officer from the
Labour Department may make a report to the Labour
Court, and require the employer or CBA or the registered
trade union concerned, to appear before the Court. The
Court may, within 10 days, order the strike or lockout to be

Labor Law
Labor laws are designed for the protection of
workers from the unlawful conduct of their
employers. It covers all facets of torts on
employment issues. These laws preserve the
employer-employee relationship and encourage both
parties to work together peacefully. Labor laws also
prevent unfair labor practices.

The laws are used to maintain and to safeguard the
interest of the employees especially on legal rights.
Important to maintain peace and harmony between
the employers and the employees.
To increase the productivity.
Labor laws also permit employees to form unions
and grant them the rights to perform union
activities. Employers cannot prohibit their
employees from exercising their rights to be heard.

Labor Laws in Pakistan
According to data produced by the CIA World Fact book, the total number of Pakistan's labour force is
55.8 million, making it the ninth largest country in terms of available human workforce. About 43% of
this labour is involved in agriculture, 20.3% in industry and the remaining 36.6% in other services.
The Constitution of Pakistan contains a range of provisions with regards to labour rights found in Part
II: Fundamental Rights and Principles of Policy.

Article 11 of the Constitution prohibits all forms of slavery, forced labour and child labour;

Article 17 provides for a fundamental right to exercise the freedom of association and the right to
form unions;

Article 18 proscribes the right of its citizens to enter upon any lawful profession or occupation and
to conduct any lawful trade or business;

Article 25 lays down the right to equality before the law and prohibition of discrimination on the
grounds of sex alone;

Article 37(e) makes provision for securing just and humane conditions of work, ensuring that
children and women are not employed in vocations unsuited to their age or sex, and for maternity
benefits for women in employment.

Labour Laws in Pakistan
The Minimum Wages for Unskilled Workers Ordinance,
Minimum Age and Protection of Young Workers
Health and Safety
Paid Leave
Working Time and Rest Time
Contract of Employment

Some Clauses from Labor Law of Pakistan
The Minimum Wages for Unskilled Workers Ordinance, 1969

According to this Ordinance, the amount of minimum wages for
unskilled worker should not be less than PKR 6,000[ Updated 2012
PKR 9,000 (per month for 26 working days) and PKR 346.23 (per day
for 8 working hours)].
Wages are construed as the total remuneration payable to an employed
person on the fulfillment of his or her contract of employment. It
includes bonuses and any sum payable for want of a proper notice of
discharge, but excludes the value of accommodations i.e., supply of
light, water, medical attendance or other amenities excluded by the
Provincial Government; the employers contribution to a pension or
provident fund, traveling allowance or concession or other special
expenses entailed by the nature of his or her employment; and any
gratuity payable on discharge

Minimum Age and Protection of Young Workers

Article 11(3) of Pakistans Constitution expressly prohibits the
employment of children below the age of fourteen years in any factory,
mine or other hazardous employment.

Young Persons

Workers between the ages of 14 and less than 18 years will not be
engaged in hazardous working conditions and other working
environments that adversely affect their physical and moral
development. They will also be provided greater access to education
and training, particularly training, tailored to identified labour market
needs. Children and young persons will be withdrawn and prevented
from hazardous nature as, for example, mining, tanneries, brick kilns,
construction, and glass bangles etc.

Working Time and Rest Time

Working hours
Under the Factories Act, 1934 no adult employee, defined as a worker who has
completed his or her 18th year of age, can be required or permitted to work in any
establishment in excess of nine hours a day and 48 hours a week. Similarly,
no young person, under the age of 18, can be required or permitted to work in excess
of seven hours a day and 42 hours a week. The Factories Act, which governs
the conditions of work of industrial labor, applies to factories, employing ten or
more workers. The Provincial Governments are further empowered to extend the
provisions of the Act, to even five workers. Where the factory is a seasonal one, an
adult worker shall work no more than fifty hours in any week and no more than ten
hours in any day.

Rest time
The law further provides that no worker shall be required to work continuously for
more than six hours, unless he or she has had an interval for rest or meals of at
least one hour.
During Ramadan (fasting month), special reduced working hours are observed in
manufacturing, commercial and service organizations.

Paid Leave

As provided in the Factories Act, 1934, every worker who has completed a
period of twelve months continuous service in a factory shall be allowed,
during the subsequent period of twelve months, holidays for a period of
fourteen consecutive days. If a worker fails in any one such period of twelve
months to take the whole of the holidays allowed to him or her, any holidays not
taken by him or her shall be added to the holidays allotted to him or her in the
succeeding period of twelve months.

A worker shall be deemed to have completed a period of twelve months continuous
service in a factory notwithstanding any interruption in service during those twelve
months brought about by sickness, accident or authorized leave not exceeding
ninety days in the aggregate for all three, or by a lock-out, or by a strike which is not
an illegal strike, or by intermittent periods of involuntary unemployment not
exceeding thirty days in the aggregate; and authorized leave shall be deemed not to
include any weekly holiday allowed under section 35 which occurs at beginning or
end of an interruption brought about by the leave.

Contract of Employment

Article 18 of the Constitution affords every citizen with the right to enter upon
any lawful profession or occupation, and to conduct any lawful trade or
Every employer in an industrial or commercial establishment is required to
issue a formal appointment letter at the time of employment of each worker.
The obligatory contents of each labor contract, if written, are confined to the
main terms and conditions of employment, namely nature and tenure of
appointment, pay allowances and other fringe benefits admissible, terms and
conditions of appointment

Termination of Contract
The services of a permanent worker cannot be terminated for any reason other
than misconduct unless one months notice or wages in lieu thereof has
been furnished by the employer or by the worker if he or she so chooses to leave his or
her service. One months wages are calculated on the basis of the average wage earned
during the last three months of service. Other categories of workers are not entitled to
notice or pay in lieu of notice.
All terminations of service in any form must be documented in writing stating the
reasons for such an act. If a worker is aggrieved by an order of termination he or she may
proceed under Section 46 of the Industrial Relations Ordinance 2002, aimed at
regulating the labour-management relations in the country, and bring his or her
grievance to the attention of his or her employer, in writing, either him or herself,
through the shop steward or through his or her trade union within three months of the
occurrence of the cause of action. Forms of termination have been described as removed,
retrenched, discharged or dismissed from service. To safeguard against any colorful
exercise of power, victimization or unfair labour practices, the Labour Courts have been
given powers to examine and intervene to find out whether there has been a violation of
the principles of natural justice and whether any action by the employer was bonafide or

HR Policy Manual & Labor Law
HR Policy is rules or guidelines; policy is the organizations
principles; policy sets out the way that things are done; policy
creates a framework for the way you do your work; policy sets
the standards for the organization; policy arises from best
Labor Law of Pakistan provides guidelines to the HR
department of any organization in drafting the HR policy
Two sample HR policies(procedures) are elaborated in the
next section
The working hours policy is compiled on the basis of the
working time and rest hours clause. Whereas the annual leave
policy is derived from the paid leave act of labor law.
Hours of work are scheduled to meet the production and work requirements of the Company,
and are in conformance with all applicable local laws and practices.
Working Hours
The Company shall determine the hours of work:
Office Hours
Monday through Friday
09:00 am. 6:00 pm.
9 am to 8 p.m. (Shops operating on one window operation concept)
Saturday :The shops timings will be determined by the Customer Service Management
keeping in view the customer needs.
Sixty (60) minutes meal breaks each day from Monday through Thursday.
Ninety (90) minutes meal / prayer break for Friday.
Employees may be requested to work on any of the holidays or regularly scheduled day of rest
including Saturday/Sunday, if the Companys business so requires.
Any employee not abiding by the working hours Policy will initially be counseled by his /her
immediate supervisor / office manager. Any repeated act will be reported to the Human
Resources in writing who will refer the discipline policy for further proceedings.

Paid Leave Policy-Annual Leave Policy


Policy providing information on employees annual leave/paid leave

On completion of 12 months employment, all full time employees
are entitled to 14 days annual leave during the subsequent period of
twelve months.
If a worker fails in any one such period of twelve months to take the
whole of the holidays allowed to him or her, any holidays not taken
by him or her shall be added to the holidays allotted to him or her in
the succeeding period of twelve months.

Notifying of desire to take annual leave

Employees need to submit leave form to their managers at least 2
weeks in advance of taking there leave.
Wherever possible applications for leave will be approved, however
the company needs to take in account work requirements and the
performance of the employees duties when considering whether to
grant leave. For example, if another employee has already booked
leave at that time, in a small team may be not possible to allow two
people to have leave at the same time.

Recording Annual Leave Taken

All employees must complete a leave application form for all leave
taken. This will be recorded on their personnel files.

A) Highly skilled.- Highly skilled work employee is one who does the work which involves skill or competence of
extra-ordinary degree and possesses supervisory ability.

(B) Skilled.- Skilled employee is one who is capable of working independently and efficiently and turning out accurate
working. He must be capable of reading and working on simple drawing circuits and process, if necessary.

(C ) Semi-skilled.- Semi-skilled employee is one who has sufficient knowledge of the particular trade or above to do
respective work and simple job with the help of simple tools and machines.

(D) Un-skilled.- Un-skilled employee is one who possesses no special training and whose work involves the
performance of the simple duties which require the exercise of little or no independent judgement or previous
experience although a familiarity with the occupational environment is necessary.

comes in unskilled category.

BEARER, MALI WITH TECHNICAL EXPERIENCE comes in unskilled category


TRAVELLING SALESMAN, comes in this category