ZAFAR & ASSOCIATES - LLP | Industrial Law Services - Pakistan

Industrial Law Practice in Pakistan

Industrial law relates to the governing of industrial enterprises, inclusive of formation of trade unions, employment concerns, industrial relations between employers and workmen, safety regulations and trans-regional establishments and industry.

Industrial law regulates the relations between employers and employees and their representative organisations. It concerns the prevention and people at work meeting settlement of industrial disputes by conciliation and arbitration, or by agreement, or proscription.

The Industrial Relations Act 2012 ('IRA') was enacted to regulate the formation of trade unions, trade union activities, determination of collective bargaining agents, regulation of relations between employers and workmen, the avoidance and settlement of any differences or industrial disputes and ancillary matters.

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Applicability & Scope of Work

Industries are the backbone of a country’s economy. Industrialization plays a vital role in the economic growth and development of any country as it is the first and foremost requirement of a country’s rapid economic growth. It promotes agriculture, trade, transport, foreign trade, services and social sectors of the economy. It increases employment opportunities, national income, per capita income and living standard of the populace.

For smooth functioning of industries, industrial laws are inevitable. Industrial law relates to laws governing industrial enterprises. They regulate relations between employer and employee and their representative organization. Industrial laws vary widely and cover a wide array of topics ranging from employment laws to environmental concerns, contracts, industrial relations, and worker safety regulations. There is a variety of industries and each is as unique as the business it relates to. Industrial Laws help to put an end to unfair labour practices and provides for the rights, privileges, obligations and responsibilities of the workforce. Industrial legislation helps both workers and management to know exactly about their rights, duties and obligations and also the liabilities. Industrial laws are also essential in protecting the environment.

These laws compliment in smooth running of the business with regard to matters relating to employers and employees in order to achieve the target of higher productively, reasonable profits, better wages and reduction in unjust practices or discrimination.

Objectives of Industrial Law

The primary goal of Industrial Laws is to regulate and improve the employers’ relation with their employees hence creating a productive and engaged workforce. Following outlines the important objectives of industrial laws:

• To safeguard the labour force against any sort of exploitation

• To protect the interest of employees and employers by building up a congenial relationship

• To provide for the employee’s welfare and amenities

• To avoid the human conflicts which can harm the business, the employees and the economic growth of the country

• To increase the productivity

• To improve the economic conditions of the workers

• To reduce the number of industrial disputes like strikes, lock outs etc

Industrial Laws assist in putting a stop to unfair labour practices and establishing the rights, privileges, obligations, and responsibilities of the workers.

Industrial Law Policy in Pakistan

An industrial policy (IP) or industrial strategy of a country is its official strategic effort to encourage the development and growth of all or part of the economy, often focused on all or part of the manufacturing sector. The industrial policy seeks to provide a framework of rules, regulations and reservation of spheres of activity for public and private sectors.

Industrial sector contributes to about 20% in the total GDP. Cotton textile production and apparel manufacturing are Pakistan's largest industries, accounting for about 65% of the merchandise exports and almost 40% of the employed labour force, followed by sports good and leather goods industries. Pakistan’s Industrial policy is crucial to sustainable growth of industrial development and country’s economy. A strong industrial policy in Pakistan is the need of the hour to develop its crippled economy. Our industries are the major exporters; therefore, a comprehensive industrial policy should be designed at the earliest.

Industrial Law Practice in Pakistan

Ever since its establishment, Pakistan has gradually developed a number of legislations including ordinances, acts, rules and regulations that regulate industrial operations which not only cover labour and employment laws but also takes into account laws relating to other industrial practices. In fact, the constitution of Pakistan also terms employees’ rights as a Fundamental Right of its citizens and have been specified in the Principles of Policy as well. Articles 11, 17, 18, 25 and 37 (e) are some of the provisions that safeguard employees’ rights against any sort of exploitation or harassment at the workplace. The aim of these laws is socioeconomic and industrial development, trade union growth and higher literacy levels which shows its governments’ commitment towards overall progress of the country.

ZA-LLP have been rendering its services in the industrial sector of Pakistan since 1975. We have a team of dedicated and learned industrial relations lawyers who are adept in industrial relations and labour laws. These lawyers represent and advise employees, including organisations from the corporate and public sector, on employment law issues and workplace disputes.

Some major industrial laws prevailing in Pakistan are:

Industrial Labour & Employment Laws in Pakistan

Labour laws in Pakistan is broad and date back to legislations inherited from pre-partition era to regulation proper functioning of service industry. Several labour and employment laws exist in Pakistan for salaries and wages, workplace security and safety, annual paid leaves, employment security, formation of labour and trade unions and to curb child labour, workplace harassment and bonded labour, Some important labour laws prevailing in Pakistan are:

• Apprenticeship Ordinance, Rules

• Boilers & Pressure Vessels Ordinance

• Employment of Children Act and Rules

• Companies Profit (Workers Participation) Acts & Rules

• Dock Labourers Act, Regulations and Dock Workers Employment Regulation Act

• Factories Act and Rules

• Mines Acts and Rules

• Payment of Wages Act, Procedures, Minimum Wages Rules

• Workmen Compensation Act and Rules

Industrial Relations Ordinances

The first industrial relations ordinance was introduced in 1969 but was later repealed by ordinances approved by the governments from time to time as according to the advancement in technology (in 2002, 2011 etc.) The scope of these ordinances is to strengthen the participation of workers in decision making and promote a measure of durable stability in labour-management relations by making the employers and workers aware of their rights and obligations. The Ordinance of 1969 existed in the retrospect of nationalization but the new ordinance (of 2012) is more balanced and grants freedom for formation of trade and labour unions.

Laws on Industrial Development

The Pakistan Industrial Development Corporation (PIDC) was established in 1952, to set up industries in the public sector where large capital was required and in backward areas of the country to create employment opportunities.

Provincial Industrial Development Corporation Ordinance, 1963

Laws governing the functioning of this corporation are defined in Provincial Industrial Development Corporation 1963.

The West Pakistan Industries Control on Establishment and Enlargement Ordinance, 1963

This ordinance provides for the organized and planned growth of industries in Pakistan. It restricts unauthorized establishment and enlargement of industries. After the 18th amendment in the constitution, each province has developed its own laws for the same.

Development of Industries (Federal Control) Act, 1972, repealed in 1979

During the process of nationalization, the federal government had complete control of the industrial sector which was provided under this act but it was later repealed in the 1979 act.

Industrial Development Bank of Pakistan Ordinance, 1961

The Industrial Development Bank of Pakistan (IDBP), the oldest financial institution primarily responsible for financing the manufacturing sector (industries) of the economy, was established under this ordinance. It has also played a significant role in financing small and medium scale industries.

Small Industries Corporation Laws

The statutory body of Pakistan Small Industries Corporation (PSIC) was established in 1972 with the mission to promote, sustained industrial development through provision of market driven credit, infrastructure and technological support contributing to employment generation, poverty alleviation and socio-economic uplift of the country. Laws regulating operations of small industries at provincial level are:

• The Punjab Small Industries Corporation Bill, 1973

• Sindh Small Industries Corporation Bill, 1973

Laws on Industrial Research

Pakistan Council of Industrial Research (PCSIR) has been established with an emphasis on providing research and development solutions to Industrial problems, helping Industry to manage and reduce waste and use indigenous material, processes and technology, to increase their internal rate of return to be more competitive. The relevant laws for industrial scientific development and research are:

• Pakistan Council of Scientific and Industrial Research Act, 1973

• Industrial Statistics Act, 1942

Miscellaneous Industrial Statutes

• Hydrogenated Vegetable Oil Industry (Control and Development) Act, 1973

• Cotton Ginning and Pressing Factories Act, 1925

• Cotton Industry (Statistics) Act, 1926

Industrial Business & Trade Laws

The business and trade laws directly impact the industrial sector of Pakistan, which plays a vital role in manufacturing of final goods. Pakistan has raised the tariff on imported items to encourage and promote the local industrial products. The umbrella of industrial business and trade laws cover:

• Export laws like Pakistan Export Regulations, Sugar Export Subsidy Fund Ordinance, 1970, Export Processing Zones Authority Ordinance, 1980, The Export Development Fund Act, 1999, Imports and Exports (control) Act, 1950

• Staple Cotton (Excise Duty) Ordinance, 1978

• Rules of Business, 1973

• Foreign trade laws like Customs Act, 1969, Rules and Tariffs, National Tariff Commission Act 2015., Anti Dumping Ordinance,2015, etc

Applicability of Environmental Laws in the Industrial Sector

The Pakistan Environment Protection Agency should assure that industries comply by the Environmental protection laws like The Environmental Protection Act, 1997, for the safe disposal of hazardous waste. Any violation of these laws will initiate a strict legal action against the industries polluting and harming the nature. The industrial waste released in air and water can be very toxic for the environment and living beings residing around them. Pakistan has also established a centralized system for the safe disposal of hazardous material.

Conclusion

Hiring an industrial lawyer in the early years of your business can help with educating and familiarising yourself with national and state employment laws, industrial development laws, scientific research and development laws in industries, industrial business relation and infrastructure laws and last but not the least, environmental laws. This can ensure that any workplace rules and regulations you set or documents you draw up complies with those laws. Doing so can work to minimise the occurrence of costly disputes in the future.

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