Dear Learned Professionals

Background

This refers to TLQC 1445 dated 9.4.21, etc (in trail, in blue, in italic and after double line) whereby we sent our Commentary on NA proposed bill about Increase in Minimum Rates of Wages whereby the Minimum Wage was proposed to be Rs 25,000 per month with effect from 1.7.21 till 30.6.22.

You may have seen KQU # 1116 dated 14.7.21 (Afternoon) whereby we shared the link of the “Sindh Minimum Wage Notification 2021” in Miscellaneous Important area alongwith several other updates.

Commentary

1.   Government of Sindh has issued Notification dated 9.7.2021 issued by Govt. of Sindh Labour & HR Department (Attachment 25.1) fixing Minimum Wage for the Province of Sindh at the rate of Rs 25,000 per month w.e.f. 1.7.2021.

2.   Employers’ Federation Pakistan (EFP) issued a Circular dated 14.7.21 (Attachment 25.2) stating that this Notification has been issued in violation of the procedure mentioned for fixing of Minimum Wage in the Sindh Minimum Wages Act and suffers from serious legal lacunas, therefore, EFP decided to file Constitutional Petition in the Sindh High Court (SHC) to challenge the Notification and seek stay against the Notification.

3.   As per reliable sources, the EFP members, etc and other Companies had submitted a Petition alleging Sindh Govt to score political mileage, announced an increase in Minimum Wage of the unskilled workers from Rs 17,500 to Rs 25,000 per month without even initiating statutory requirements as contained in the Sindh Minimum Wages Act. They informed the SHC that they had earlier raised objections against the recommendations of the Sindh Minimum Wages Board on various legal and factual grounds but they were not invited in the Board Meeting to decide the Minimum Wage.

4.   The Petitioners said the EFP, however, after consultation with the members, informed the Government that they were agreed to increase the Minimum Wage from Rs 17,500 to Rs 19,000 per month. But instead of considering the Employers’ Offer, the Sindh Government had issued an impugned Notification by fixing the Minimum Wage of Rs 25,000 per month for unskilled workers, while Secretary Labour did not send a proposal to fix Minimum Wage of Rs 25,000 to the Board. They also submitted that as many as 43% increase in Minimum Wage was irrational and without any legal consideration, which would have consequential effect in terms of variable cost on account of allowances, leave bonuses and gratuity etc.

5.   The Petitioners pleaded the SHC that besides increasing the Minimum Wage of unskilled workers, it would also invoke a proportionate increase in the wages of other workers’ categories that might disrupt the entire compensation structure, it would adversely impact even amounting to closure of business, submitting that the Minimum Wage in other Provinces has been fixed Rs 20,000 per month from July 1 and the fixation of Rs 25,000 in Sindh would place the Petitioners in the most uncompetitive and disadvantageous position.

6.   The Petitioners also pleaded the SHC to declare the impugned Notification as unlawful and requested to suspend the implementation of Notification till the decision of the petition. The SHC has issued notices to the secretary labour, Minimum Wage board and advocate general, directing them to submit their comments on August 6.

7.   The SHC directed that the Petitioner Companies may kindly note that since the Notification is not suspended by Hon’ble SHC, however, is assailed and subjudice before SHC, therefore, the Companies are advised to exercise their discretion without fear of any punitive action & above clarification is issued for the guidance of the member companies on the points as to whether the Minimum Wage @Rs 25,000 has become immediately payable.

8.   The SHC had issued Notices to the Secretary Labour, Minimum Wage Board and Advocate General of Sindh and fixed 6.8.2021 to hear the stay application.

Best regards

Asif