September 1st, 2021
By Rehan Piracha
A group of employers have challenged Rs 25,000 minimum monthly wage for unskilled workers in the Sindh High Court while the Pakistan Institute of Labour Education and Research (PILER) has termed the move unjustified saying the employers had failed to pay the minimum wage to 80 percent of their workers.
Karamat Ali, executive director of PILER, told Voicepk.net that a study conducted by the World Bank two years ago stated that 80 percent of workers in Pakistan earned two US dollars per day which was less than then the previous minimum monthly wage of Rs 17,500. “If the employers had been paying the monthly minimum wage it would have amounted to three US dollars,” Ali said.
He said the minimum monthly wage as notified by the provincial and federal governments was still half of the amount required to sustain workers. “International organisations have calculated that the minimum monthly wage for unskilled workers in Pakistan should be set at Rs 35,000 per month,” he said.
Karamat Ali said that the minimum wage in Punjab was set Rs 120 in 1969 but a study conducted by the Punjab University then had worked out that a worker had to be paid Rs 270 to meet living expenses. “The employers had always resisted increase in minimum wages despite failing to pay even the notified wage to their workers,” he said. Ali said PILER and workers unions intend to join court proceedings in the petitions challenging the Rs 25,000 monthly minimum wage in Sindh.
On July 9, the provincial labour department issued a notification for increasing the minimum monthly wage from Rs 17,500 to Rs 25,000 following an order from the Sindh chief minister. Other provinces have set the minimum wage at Rs 20,000.
A division bench, headed by Justice Salahuddin Panhwar, on Tuesay directed secretaries of the provincial industries department and Minimum Wages Board to appear before the court on September 2, along with minutes of the meetings regarding fixation of minimum monthly wage. The bench was hearing a petition moved by the Employers Federation of Pakistan and others against the hike in the provincial monthly minimum wage.
The secretary of the Minimum Wages Board told the court that the Labour and Human Resource Department initiated the summary for chief minister of Sindh on June 1 for approval of fixation of minimum wages of Rs19,000 per month for unskilled workers in the province. He stated that the chief minister had passed an order that the provincial cabinet had approved minimum wages of Rs25,000 per month, adding that the labour department accordingly issued a notification of Rs 25,000 monthly minimum wage on July 9.
In his comments, the secretary of the Minimum Wages Board submitted that the Supreme Court has settled the principle in various judgments that the court cannot interfere in the government policies unless those violated any fundamental rights or were inconsistent with any law. He requested the court to dismiss the petition in the interest of justice.
The Employers Federation of Pakistan and other petitoners stated that the provincial government had hiked the minimum wage of workers from Rs17,500 to Rs25,000 per month in the budget to score political mileage, ignoring statutory requirements listed in the Sindh Minimum Wages Act. The petitioners said the representatives of the employers had objected to the recommendation of the minimum wages board on various grounds but they were not invited to the board meeting.
The petitioners said the employers informed the government that they were ready to increase minimum wage from Rs17,500 to Rs19,000 per month but the government instead issued the notification of Rs25,000 per month. The employers submitted that the 43% increase in minimum wage was irrational and without any legal basis, which will have a consequential effect in terms of variable cost on account of allowances, leave bonus and gratuity.
The hike in minimum wage will affect the whole compensation structure of the petitioners and have an extremely adverse impact even amounting to closure of business. The employers stated that the minimum wage in other provinces has been fixed at Rs20,000 per month from July 1 and fixation of Rs25,000 in Sindh will place the petitioners in the most uncompetitive and disadvantageous position.
The bench directed that all petitions pertaining to fixation of minimum wages shall be fixed along with the petition on September 2.