Private employers have shared plans to approach courts against the minimum wage of Rs25,000 proposed by the Sindh government in its recent budget. They have raised objection that the provincial leadership raised salaries for unskilled workers without following due procedure.
“If the minimum wage is imposed through a Finance Act, it can be challenged legally in view of the Supreme Court’s judgment that labour laws cannot be amended through Money Bill or Finance Act,” said Advocate Zaheer Minhas.
Alternatively, the issue will be referred to the Minimum Wage Board, which will oppose the same and call upon the government to revise the amount to the earlier agreed value of Rs19,000 per month, he said while talking to The Express Tribune.
If the government disregards the suggestions of employers, the decision can still be challenged on grounds that Employers Federation of Pakistan (EFP) expressed its reservations at the Minimum Wage Board meeting.
Minhas explained that raising minimum wage to Rs25,000 per month would cost the employer around Rs35,000 as companies would be forced to raise payment of allowances, bonuses, gratuity and provident fund as well.
“The actual figure is 100% more than the current minimum wage of Rs17,500 per month,” he said. “It is impossible for employers to pay around Rs35,000 at a time when companies are struggling to recover from the impact of the pandemic.”
He voiced fear that it would hike the cost of doing business substantially and encourage firms to shift their businesses from Sindh to other provinces.
However, a labour leader claimed that the government had held prior discussions on the matter with the stakeholders.
“Minimum wage is decided by the board and it includes representation from employers and employees,” said Pakistan Institute of Labour Education and Research (PILER) Advocacy Manager Shuja Qureshi.
He recalled that Sindh had revised minimum wage after a gap of two years. Last year, the government did not announce any change in wages and this year, it held several meetings to deliberate on the issue but failed to reach a consensus.
He held the opinion that the increase was inadequate compared to the high inflation rate in the economy.
Minimum wage in Punjab
On the other hand, Punjab Chief Minister Usman Buzdar fixed the minimum wage for unskilled workers at Rs20,000 in line with the federal minimum wage.
Minhas pointed out that the decision was endorsed by the Minimum Wage Board and the department forwarded its recommendation to the government so it can release a notification.
He stated that the Employers’ Federation of Pakistan filed an objection which was ignored and the association would now file a constitutional petition challenging the notification.
Read more: Sindh PA passes Rs1.4t budget amid protest
Minimum wage in K-P
Meanwhile, Khyber-Pakhtunkhwa has recommended a minimum wage of Rs21,000 for unskilled workers. Through a notification dated May 31, 2021, the Minimum Wage Board requested filing of comments and objections within a month’s time.
Sindh Minimum Wage Board member Gulfam Nabi Memon termed it technically wrong that the government of Sindh announced minimum wage directly without holding a meeting with the Minimum Wage Board.
He stressed that the government might not rescind this decision despite pressure from employers and other organisations.
“However, I fear that employers might not pay Rs25,000 per month to unskilled workers,” he said.