Employees’ Rights Are Not Limited To The Definition Of Worker

Employees’ Rights Are Not Limited To The Definition Of Worker

If you are reading this, and you are not lucky enough to have started your own business, or even luckier to have been born into one, it is quite likely that you will not enjoy the benefits of employee welfare laws that are currently in force in Pakistan. In fact, it is one of the travesties of justice that judicial activism of yesteryears did not do much for the employees who work in offices with titles like “executive sales officer”, “assistant manager finance” or “admin manager” as they did in other areas of law.

Let me explain.

Most of the employee welfare laws have been limited to “workers”. If we look at its dictionary meaning, it would be a person who uses physical skill and especially his or her hands in his or her job or trade. A similar definition is used in employment laws. For example the Workmen’s Compensation Act 1923 limited the definition to include such a worker as that employed in “factories, as defined by the Factories Act 1934”, or “as a construction worker”, or “in the service of a fire-brigade”, or “in any occupation involving blasting operations”, to name a few examples. None of these types of jobs comes anywhere close to something that resembles an office. The consequences of this exclusion are important because the net effect of it is that if you suffer a personal injury at work and your employer is at fault, you cannot claim compensation under this law.

Section 2 of the Factories Act 1934 defines “worker” as a person employed in any manufacturing process, or in cleaning or work incidental to or connected with the manufacturing process, but does not include any person solely employed in a clerical capacity in any room or place where no manufacturing process is being carried on. It again beggars belief that a law from the British era that was designed to be the bare minimum worker-welfare legislation necessary at that time has not been improved and updated to include those people who may not necessarily be involved in the manufacturing process but work nevertheless in the same premises and might actually require the protections that are available to “workers”. For example section 25 of this Act talks about precautions in case of fire. Subsection 25(6) provides that “a free passage-way [shall be provided] giving access to each means of escape in case of fire shall be maintained for the use of all workers in every room of the factory.” The absence of this basic protection to everyone working in any factory clearly creates an anomaly that should have been fixed a long time ago. Consider another example, section 34 requires that a worker shall not be allowed or required to work in a factory for more than forty-eight hours. For most employers in Pakistan, it may amount to heresy if their employees only work for forty-eight hours in a week, but study after study has shown that requiring people to sit in the office for hours on end does not improve their productivity. Consider this simple statistic: the average weekly working hours around the world are either below, or at forty-eight hours. Europe is at forty-one hours and India is at forty-eight. Again, the provision is only available to workers and, in my experience, is not followed by most of the employers. But we digress.

The Provincial Employees’ Social Security Ordinance 1965 introduced a scheme of social security for providing benefits to employees and their dependents in the event of sickness, maternity, employment injury or death and ancillary matters. However, it does not encompass everyone and only those persons with a salary that is equal to, or marginally above the minimum salary are covered. As result, most employees who work in the office do not enjoy the benefit of this law.

The Shops and Establishment Ordinance 1969 aims to consolidate the law relating to the hours and other conditions of work and employment of persons employed in shops/ commercial establishments. Then in Section 5 it lists the types of entities where the law would not apply, and in a curious bunch of exclusions says that the law would not apply to “any person employed as manager, travelling agent, canvasser, messenger, watchman, caretaker or conservancy staff or any person employed exclusively in connection with the collection, dispatch, delivery, and conveyance of, or custom formalities on goods”.  So while you were happy when you were given the title of manager, your employer can, if it so chooses, refuse to pay you over-time, deny you “annual leave” and “casual and sick leave”, and ask you to come to work on Eid day and it wouldn’t be in breach of this law.

Another very important piece of legislation is the Industrial and Commercial Employment (Standing Orders) Ordinance 1968 which provides provisions relating to termination and the payment of gratuity (the retirement fund if you will and “provident fund”). Although it applies to all industrial and commercial establishments, the law is woefully inadequate. For example, it says that an employer shall pay gratuity at the end of an employee’s employment (which is, in simple terms, the last salary multiplied by the number of years an employee has worked), or register a provident fund. In the case of the latter, i.e. the provident fund, the terms and conditions are not defined and the employer is free to determine the conditions under which the benefit of the provident fund will be provided to the employee. This law is limited to the “worker” and defines the term as “any person employed in any industrial or commercial establishment to do any skilled or unskilled, manual or electrical work for hire or reward.” The end result is that even if you spend your entire adult life working for a company, it would not be required to pay you anything under this law by way of gratuity if you fall outside of this law. The Supreme Court of Pakistan said this in 1986. In 2016, the superior courts said that everyone who works on a computer is not a “worker”.

If the company did set up a provident fund, the owners of the company would most likely control the fund. You cannot do much if your (former) employer refuses to pay you your provident fund, and good luck suing them in the civil court.

In the last part of my analysis, let’s look at some of the rights available to women. The West Pakistan Maternity Benefit Ordinance 1958 provides that every woman employed in an establishment shall be entitled to the payment of maternity benefit at the rate of her wages last paid during the period of six weeks immediately preceding and including the days on which she delivers the child and for each day of six weeks succeeding that day. It goes on to define a woman as “woman worker” which most likely means women employed at factories. Although there is no reported case on the subject, reading the associated Maternity Benefit Rules 1961 makes it quite clear that the lawmakers intended it for blue-collar working mothers only. Sadly there is no right to pre-natal leave.

From the above, it is clear that the law granting basic rights to white-collar employment is simply non-existent. The argument that these employees are better able to negotiate the terms of their employment (which is, therefore, a contractual matter), is not grounded in any reality and does not take into account the gross disparity of bargaining positions between the present day employers and their employees. The argument also fails to take into account the unemployment in this country and the ease with which an employer can let an employee go. The judicial interpretation of these statutes has also failed to provide any meaningful relief to the employees and the courts have consistently excluded employees who do not fit into the narrow confines of the word “workers”.

I will beg leave with this parting thought: today Pakistan’s service sector accounts for about 53.3% of the gross domestic product (GDP) and much of that is driven by commercial organizations where a majority of employees does not fall under the definition of “workers”. It is time for the policy-makers and lawmakers accept that the rights of workers do not end at a narrow definition, and require employers to extend the existing benefits provided in worker-welfare laws to white-collar employees.

 

The views expressed in this article are those of the author and do not necessarily represent the views of CourtingTheLaw.com or any organization with which he might be associated.

Ahmed Uzair

The writer is a Partner at AUC Law, a firm that specializes in corporate law. He can be reached at uzair@ahmeduzair.com



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2 Comments

  1. syed bashir ahmed said:

    Are people working for an NGO, welfare association entitled to overtime, annual leave and health benefits?

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