April 11, 2020 (MLN): The National Steel Advisory Council (NSAC), an association of major iron and steel producers of Pakistan’s Steel Manufacturing Industry, has sent a letter to the Chief Minister of Sindh pointing out the impact the extended lockdown is having on the general business activity of the steel industry.
‘Since the lockdown appears to pass April 2020, the industries are confronting genuine monetary imbalance because of the preceded conclusion of activities. The steel companies in Pakistan were already on the risk of closure prior to the lockdown and are now conveying to us that it is getting progressively hard for them to endure and continue with the present workforce without enforcing cutbacks since conditions are not in their control’, the letter said.
‘This is an alarming situation which requires immediate attention to save thousands of employments and businesses in the country. The Standing Orders Act permits them to make vital moves including laying off their laborers for as long as 14 days with half compensation and to terminate them if the circumstances go ceaseless for an uncertain period.
‘In the light of aforesaid statements, therefore the situation is becoming extremely complex. On the other hand, the industries are not able to operate and also the employees are unable to survive without social protection and direct assistance from the Central and Provincial Government’ it added.
Accordingly, NSAC has come up with the following recommendations:
1. Every factory, industrial and manufacturing establishment, should immediately be “allowed to establish an Emergency Fund” comprising of the followings:
a) Adjusting employees leave balances for the current and next years’ leave entitlement.
b) Amount due to be paid to employees on account of bonus for the current year.
c) Amount distributable among employees on account of WPPF for the current financial year.
d) Amount of 5% of profit payable on account of WWF.
e) The amount payable to SESSI and EOBI on account of their monthly contributions should be suspended for a year and the resulting amount to be transferred to the proposed fund.
f) WWF has huge Funds available with it which can be transferred to companies for utilization of payment of wages. It is proposed that the last five years' contribution by industries to WWF be refunded to respective enterprises for utilization in this fund.
2. The Fund so accumulated as a result of the above components may be used by enterprises/industries for payment of workers’ wages which may meet the requirement for the next 3 months.
3. Enterprises may be required to send monthly statements to the NSAC and the Labor Department showing utilization of this Fund.
4. NSAC suggests that in case the Lockdown situation gets over earlier than the utilization of this Fund, the balance amount remaining in the Fund may be refunded to the respective sources from where it was initially generated.
5. NSAC proposes that in case of SMEs where entitlement of bonus, profit sharing, WWF, etc. does not arise, special allocation be made from the WWF and Government’s economic relief package/Emergency Funds to help them pay wages to their workers.
6. NSAC understands the challenges being faced by the Government and continues to strive for national interests in the current situation as well, in this regard, NSAC proposes to allow exports of steel products which may simultaneously encourage the industries as well as contribute towards the national exchequer.
7. Steel products are an essential requirement of the strategic and defense sector of any country, hence it is requested that permission must be granted to all steel companies to continue supplying their products to the Defense, Armed Forces.
‘If the above recommendations are however not acceptable, NSAC demands from the Government that the enterprises/industries be allowed to lay off their workers for April 2020 on 50% wages and to mitigate the sufferings of the workers and the remaining 50% of the wages to be paid out of the allocation from the substantial employers' contribution lying in the form of workers welfare fund with the Sindh Workers Welfare Fund Board. However, If the lockdown continues to May 2020, 100% of the wages to be paid out of the amount lying in the Workers Welfare Fund Board’ the letter further added.
NSAC believes that if the government does not come out with substantial support to the steel sector by pursuing the above recommendations, the economic and social consequences of COVID-19 will result in complete social and economic breakdown with grave consequences. The steel sector contributed heavily to national exports with the exports amounting to approximately 150,000 Metric Tons in 2015-16.
NSAC has therefore requested the Sindh Government to look into this matter immediately before it becomes too late.
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